Preamble

The House met at Eleven o'Clock

PRAYERS

[Mr. Speaker in the Chair]

Orders of the Day — JUDGES PENSIONS (INDIA AND BURMA) BILL

Order for Second Reading read.

11.5 a.m.

The Secretary of State for Commonwealth Relations (Mr. Philip Noel Baker): I beg to move, "That the Bill be now read a Second time."
The main purpose of this Bill is to enable us to grant pensions to European barrister judges who have been members of the High Courts in India and Pakistan, and who feel that with the changed conditions they cannot usefully continue to serve. As the House is aware, European judges used to be recruited for the Indian courts either from the judicial branch of the Indian Civil Service, or from among barristers who practiced in the United Kingdom or in India. The majority of the European judges, in fact, come from the I.C.S. It has been agreed, after some discussion with the Governments of India and Pakistan, by all concerned, that, like other members of the Indian Civil
Service, I.C.S. judges are entitled to retire at their discretion on proportionate pensions. But judges recruited from the Bar have no such statutory right, and, as I say, the main purpose of the Bill is to ensure that such a barrister judge, who retires before he qualifies for a pension under the ordinary rules which govern the matter, shall not be left without resources.
As the House is probably aware, His Majesty's Government in this country at first came to the conclusion, after we had consulted the Viceroy, that the constitutional changes which would follow the transfer of power would not affect the fundamental position of these judges. The judiciary were still to remain independent of the Executive. For that reason, it was felt that we could not press the Indian leaders to grant these judges

a right to retire on proportionate pension, or to give them compensation. It is still true that the judiciary have retained their independence. I make no suggestion to the contrary, but it has become plain that the continued service of European judges is no longer acceptable to some at least of the Provincial Governments. That fact made it necessary for the Government here to consider the matter again. Of course, we have no wish whatever to discourage the continued service of European judges in India or Pakistan. No one here would have any such desire. Far from that, we all hope that they will continue to serve as long as their service is acceptable to the Government for whom they work.
We feel, indeed, and I think that it is clear, that an impossible situation has occurred, impossible for everyone, if a European judge comes to feel that his continued services are unwelcome. We thought that such a man should be eligible both for a proportionate pension and for compensation, and if the Government of India or Pakistan did not think it right for them to accept the financial liability which this involved, then it ought to fall on the Exchequer
of this country from which these judges come. We have had discussions on these points with the Governments of India and Pakistan, and we have decided that it is necessary for our Exchequer to bear the cost. I am sure that the House will agree that it is right for us to do that rather than to leave these judges without provision when they think it right in the public interest that they should retire. It may perhaps be convenient if I say a word or two about the Clauses of the Bill.
Clause 1 contains its main substance—the main purpose which I have described. It enables us to grant a pension to a barrister judge who retires before he has qualified for a pension under the ordinary rules which govern the matter. The pension which he is to get will be a proportion of the maximum specified in the Government of India (High Court Judges) Order for the particular appointment which the judge in question happens to hold. A proportionate pension based on service alone would not be adequate because the barrister judges are appointed at a later age and because most of them have served for a comparatively short period


of time. Therefore, we have added two years to their service for the purpose of determining the amount of pension they are to have, and we have also fixed a minimum of £500 a year because we think that no judge should have less than that. Clause 1 also lays it down that the proportionate pension shall not exceed the pension the judge would have received had he served his full term. That is obviously right and necessary.
Clause 2 relates to the Indian Civil Service judges. As I have said, these judges have a statutory right to pension, and it is now agreed that they shall all have the right to retire on proportionate pension, if they desire to do so, just as other members of the I.C.S. have that right. But in the I.C.S. the judges can also earn an additional £200 a year pension for 12 years' service, if they were judges in certain of the courts, and this Clause gives us the power to award to such judges, in addition to the pension which they will now receive under the I.C.S. rules from India or Pakistan revenues, a proportion of the extra £200 a year which they would have received according to the proportion of the 12 years they have served.

Mr. Ellis Smith: Is that a minimum?

Mr. Noel Baker: It is an addition to the other pension. As the I.C.S. judges will have a substantial pension from India or Pakistan, we do not think that we need give them the concession of the two extra years which we have provided for the barrister-judges in calculating their service in Clause 1.
Clause 3 (1) applies to one particular judge, Sir Patrick Spens, whose case is peculiar. The Clause is drafted in this form because it is just possible—I will put it no higher than that—although I do not think it is probable, that the Government of India may agree that the pension we think he ought to have is a liability on them. In any case, we intend, whether it shall come from the Government of India or from our Exchequer, that Sir Patrick Spens shall have a pension calculated on the same formula as applies under Clause 1 to High Court judges. We are calculating it with reference to the maximum pension of the Chief Justice of the Federal Court. The effect will be to give him the pension which he would have

earned had he served as Chief Justice until the age of 65. I am sure the House will think that is right.
Clause 3 (2) enables us to grant an additional pension to a barrister-judge who has qualified for, and who has been granted by the Government under which he served, a pension under the ordinary rules, but who has not qualified for the maximum pension for his appointment. There is at least one such case, and I think the House will wish us to deal with it.
Clause 4 relates to the barrister judges of the Rangoon Court. The Government of Burma agreed that these judges should all compulsorily retire when Burma gained her independence and be granted, at the expense of Burmese revenues, the invalid pension they would have earned at that date. As that pension is considerably below the pension which judges in India and Pakistan would receive under the terms of Clause 1, we felt it was wrong that the judges in Burma should not be on the same footing as judges in India and Pakistan. We wish to grant them the same pension, and we therefore make provision in this Clause. The Clause enables us to supplement the Burmese pension by the required amount. Clause 5 prescribes the method of calculating service for proportionate pension. It is the method which applies to ordinary pensions and is quite straightforward.
Certain courts have been created in India and Pakistan since August, 1947, to which the provisions of the India High Court Judges Order do not apply. Clause 2 enables us to determine how service in a new court shall count for a proportionate position. Clauses 6, 7 and 8 require little explanation, except that Clause 6 (5) reserves the right of a judge to commute a proportion of pension under the current Indian, Pakistan and Burma rules. That is a brief outline of the Bill. I shall be very happy to consider any points which hon. Members may raise. We can discuss the Clauses more fully in Committee, when we shall be very ready to consider any Amendments. I commend the Bill to the House in the hope that it will be favourably received.

11.16 a.m.

Earl Winterton: My comment on the genesis of this Bill will be slightly different from that of the right hon. Gentleman. I am afraid that I shall


have to trouble the House by going, though not to any great extent, into the past history of this matter. While we on this side are not going to oppose this Bill and are very glad it has been brought forward, we are bound to point out that we called attention to this matter some two years ago when the Indian Independence Act was passed. We are very glad that the representations we then made have at last been taken note of by the Government.
I should like to avail myself of the latitude allowed on the Second Reading of a Bill to pay a tribute to the great service rendered by the Indian Judiciary in the past, to the fine men in it, both British and Indian, who, by their integrity, learning and standing, gave it the deservedly high reputation which it possessed in the world. I should further like to convey my respectful good wishes, and I am sure those of other Members as well, to the new Judiciary both in India and Pakistan. I earnestly hope that those judges of Indian birth who have joined the judicial bench in both Dominions, having previously served in British India, will find an atmosphere congenial to their abilities.
The Bill itself belatedly recognises the position of European judges in India and Burma. The Indian Independence Act contains no reference to them except in Section 10, which lays down that those who continue to serve the new Dominion are entitled to the same conditions of service as respects pay, leave, pensions and rights as to tenure of office as they were when serving under His Majesty's Government. That is all it says, and there was no scheme drawn up for their retirement as there was for members of the Secretary of State's services in India or for the Indian Army.
The truth is that when the Indian Bill was framed proper provision for holders of judicial office was omitted. Yet, as I understand the position, and I ought to know a good deal about it, because I took part in the discussion on almost every Clause of the Indian Act, 1935, is that in the Government of India Act, 1935, High Court judges had a fixed contract of service until 60 and Federal Court judges until 65, and were only removable for misconduct if it was proved before the Judicial Committee of the Privy Council,

or if they broke down in health, or became lunatics, or bankrupts. This lacuna in the treatment of judges, which can only be described as the overlooking of their statutory right, is only another instance of the indecent haste with which His Majesty's Government evacuated India, even at the cost of repudiating its obligations to those who had served India.
We on this side have referred to the position of judges on more than one occasion, and so far as I know no one else has done so—I know of no reference made to this subject by Members opposite. My right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) first asked about them when the Indian Independence Bill was being considered in Committee. It is worth referring to some of the things that he said. He said that in view of the many requests that we had had from judges he trusted the right hon. Gentleman would be able to carry this matter further on this head of compensation and tell us whether these men were entitled to be included.
My right hon. Friend referred to the matter again at a later stage. The answer we got from the then Secretary of State was that the case for compensating European judges was not quite the same as that for compensating members of the Secretary of State's service, because judges were independent of control by the Executive. If they retained their independence and preserved their terms of service unchanged, they were not fundamentally affected by the constitutional changes. That is what we were told at the time, but nevertheless the Government seemed to have qualms about it, because, as I have said, they stated at the time that they were considering granting compensation to the judges. That is the position as regards the past.
I have already stated that we welcome the Bill for the reasons which I have given, but there are certain points which we must put forward and certain reservations which we must make. The first concerns the adequacy or otherwise of the compensation to be given. The judges, however, under the old British Indian law have a statutory contract which gives them the privilege of serving until 60 or 65 as the case may be, but many of those


who felt they must retire must suffer a diminishing income until they are 60 or 65 as the case may be, unless, of course, they are offered and accept appointments by His Majesty's Government when they come to England, in which case they may be better off than before. When the right hon. Gentleman replies perhaps he will tell us whether there are many such cases, and whether any employment has been offered by his Majesty's Government to these distinguished gentlemen. It would be useful if the right hon. Gentleman told us the lump sum of compensation to be paid in addition to the pension, and what it is going to cost the taxpayer.
There is another point to which we attach importance. Pensions may be granted to European judges who retire—and I am quoting the words of the Bill—
owing to the changed conditions resulting from the passing of the Indian Independence Act, 1947.
I want to ask the right hon. Gentleman who is to determine whether conditions have changed in such a way as to justify retirement. The Treasury might argue that so long as the pay and allowances, leave and pension all remain the same, so long, in fact, as there are no diminutions in the material emoluments of these gentlemen and the privileges which they receive, conditions have not changed, and that, therefore, a judge is not entitled to retire. Changes, however, may be much more subtle than alterations in pay and allowances and conditions of service. The whole atmosphere in which these gentlemen work may change. So far as I know, judges were never offered the choice of where they could serve after partition, whether they wish to serve in India or Pakistan. Certainly in some cases where they are serving, it is in a different Dominion to which they were before, and considerable hardship and inconvenience has been caused to them in what may be called their domestic arrangements.
Again, there may be misunderstandings and friction between the Executive and the Legislature which may manifest itself in a number of irritating ways. The Executive, which holds the purse strings, may, for example, try to keep vacancies unfilled to save money or make reductions in the staff of the courts. All of this may throw extra burdens on the judges, and, at the same time, there is at

least the danger that it may impair their dignity and comfort. I do not for a moment say these things are happening. In fact, I do not know, because we get very little information at the present time as to what is going on in India and Pakistan, but I am merely pointing out that conditions may change for a great number of reasons and may turn what had hitherto been a happy arena of work into a less happy one.
Therefore, we must ask the Government to tell us what criterion in deciding whether conditions have changed they are prepared to apply. Indeed, looking at the Bill again, I see no reason to refer to "changed conditions," at all. It would be much simpler to say that a pension could be granted to a judge who had fulfilled the other condition laid down in the Bill before he reached the normal retiring age of 60 or 65.
There are two other points which I wish to make. This Bill, if enacted, confers special benefits on Europeans, some of whom are not members of the Secretary of State's service. We on this side of the House, as the right hon. Gentleman will be aware or at any rate his predecessor knows, have continually pressed—especially is that so of my right hon. Friend the Member for Saffron Walden and myself as well as others interested in Indian affairs—the hard case of a Britisher serving in humble capacities in the non-Secretary of State's service who must serve out their contracts with the Government of either Dominion or a provincial Government as the case may be. We have asked, if conditions became intolerable for them, that they should be allowed to retire on proportionate pensions. We cannot deny to them what we are asking for those better off.
I am glad to see for the first time, as I believe we were told yesterday, that our efforts for these subordinate officials have been partly successful. It is on that understanding that we support the Second Reading of the Bill. I want to say quite frankly that if that answer had not been made, while we should have supported the principle of this Bill, we could not have accepted it as a settlement of the obligations which we owe to these men of our own race who served in India, because we have had to take into consideration a case of those men who do not belong to the Secretary of


State's service. I hope the right hon. Gentleman will not think it unreasonable of me to put these points forward, to which I have no doubt he will reply. I have carefully refrained from being unduly self-commendatory about my right hon. Friend the Member for Saffron Walden and myself, but we on this side of the House welcome this Bill because it is a very belated recognition of the points we have constantly urged from these benches.

11.29 a.m.

Mr. A. R. W. Low: I should like to follow the remarks of the noble Lord the Member for Horsham (Earl Winterton) by saying that I agree with everything he said. As I wish to keep my remarks short, I hope the Secretary of State will treat them as being made against the background of my right hon. Friend's speech. I, too, welcome this Bill because it honours an obligation which we in this country owe to these men who have served us and India and Pakistan so well. I welcome it, too, as a belated acknowledgment that His Majesty's Government were wrong in principle in their attitude towards such men as these at the time of the passing of the Indian Independence Act. For this, indeed, is a definite change in principle.
Here, for the first time, the Government are acknowledging that this country has some obligation towards British persons who served in India and Pakistan before 1947, and are still continuing to serve, even though they were not members of the Secretary of State's services. That is a great departure from previous principle, and it is we on this side who have succeeded at last in breaking down the reluctance of the Government to depart from their strict adherence to the letter of the law. I hope that following on this Bill, there will be other Bills which will honour the obligation of the Government towards those other British men, perhaps humbler, and therefore even more important, to whom my right hon. Friend referred.
Before I make certain other remarks on that point, I would refer to the point made by my right hon. Friend about the condition attached to these pensions, namely, that the judge retires whether before or after the passing of this Measure,

and I invite the attention of the Secretary of State to that retrospective Clause which says:
retires … owing to the changed conditions resulting from the passing of the Indian Independence Act, 1947.
I have read the answer that he gave on 16th November to the hon. Member for Bexley (Mr. Bramall) about the conditions attaching to the award of compensation, and they do not seem to be quite the same. The words used there were that compensation would be awarded to European judges "who retire owing to the constitutional changes."
I hope the right hon. Gentleman will answer the questions put to him from the Front Bench on this side, and, at the same time, confirm whether or not there is any difference in the meaning of those two phrases. It seems rather odd that a Government Department should not get a small matter like this technically correct. Obviously they meant to attach the same condition to the giving of pensions and to giving of compensation, so surely it would be wise to use exactly the same words?

Mr. Paget: Mr. Paget (Northampton) rose——

Mr. Low: I see one of the right hon. Gentleman's learned advisers rising, but he could only argue, as I imagine he would argue, that they mean the same. It would have been so much wiser for the right hon. Gentleman to have put this in exactly the same words.

Mr. Paget: The point I was about to put was that the present words are obviously wider.

Mr. Low: If that is the hon. and learned Gentleman's legal advice, no doubt we shall hear the comments of the Secretary of State on it later. I was advised that the words were narrower, but I bow to the superior knowledge of the hon. and learned Gentleman.
I want to come back to the question of principle behind this Bill. We have here decided that we in this country will honour what, after all, is only a secondary obligation. The primary obligation to pay the pension and compensation one would have thought lay at the door of the Governments of India and Pakistan. I was glad to hear the right hon. Gentleman tell us that he argued with those Governments as to who


should pay. But I was surprised to hear from him that the reason why the Government had come round to the opinion that some proportionate pension and compensation should be given was that it was well recognised now by all the Governments concerned that the continued services of these European judges were no longer acceptable in some quarters of India and Pakistan.
In other words, the right hon. Gentleman is saying that because of the attitude of those quarters—I imagine that means some Provincial or Central Governments—these judges are being forced or almost forced to retire. If that is so, I should have thought there would have been a much stronger case than in the case of some civil servants for pressing those Governments to make this payment. However, I realise that is all over now, and that it has been decided that those Governments will not make the payments.
Why should that have been decided in the case of judges when, in the case of much humbler men in the non-Secretary of State services, His Majesty's Government will not undertake that obligation? Will the right hon. Gentleman try to explain the difference to us? In asking questions yesterday about the humbler folk, I was amazed to hear cheers and applause from the other side of the House when the right hon. Gentleman said that His Majesty's Government would not dream of paying pensions or compensation to them. In the case of these judges, the other side of the House is applauding the view of the Government that they should be given proportionate pension and compensation——

Mr. Thomas Brown: Mr. Thomas Brown (Ince) rose——

Mr. Low: Perhaps the hon. Member for Ince (Mr. T. Brown) does not approve, but the majority on his side is applauding the Government. I cannot understand the attitude of the Government who acknowledge their obligation in the case of senior officials but are not prepared to do so in the case of junior officials. I hope they will change their minds about this. I welcome this Bill, as my right hon. Friend has done, subject to proper answers to the questions he put. I welcome it as holding out some glimmer of hope that the humbler folk, in perhaps

a few months, will be given their dues in the same way as the senior judges.

Mr. Paget: Would the hon. Member say whether these humbler people to whom he refers had security of tenure? Did they have offices which they held for life? That seems to be the difference.

Mr. Low: In many cases, as the hon. and learned Gentleman knows, they were in jobs which they reasonably expected to hold until they were of an advanced age. Their cases are not all the same, and there is a great deal of complication. I was dealing with the matter of principle. His right hon. Friend will explain to him that the cases are different but that, as I have said, they expected, and reasonably expected, to continue to a late stage in their life in the job they were in.

11.39 a.m.

Mr. Paget: There are a great many people who have an office that they hope to hold, but there is a great difference between that and an appointment which is an appointment until pensionable age subject to good behaviour. I should not have thought it was a question of humbleness or of non-humbleness, but of an entirely different form of appointment.
There is one point which seems to me important and on which I agree with what the noble Lord said. It seems to me unwise, when dealing, as we are here, with completely uncertain circumstances of a future over which we have no control at all, to use any words which may impose a limitation of our discretion. These words from Clause 2 (1, c) which are repeated on
various occasions are just the sort of words on which we shall have a departmental interpretation. That departmental interpretation, as in the old days we used to know with the Ministry of Pensions, is apt to become incredibly rigid. Since no court—or, indeed, any assembly—can question it, one is never in a position to say whether a certain thing really comes within the meaning of the words or not. That seems to me unwise in a Measure of this sort.
We are dealing with men to whom we owe a moral responsibility. They are going into circumstances over which we have no control. One really has no idea at all of the sort of reasons which may lead them to accept those jobs. After all, a man who is a judge does not take


up that job primarily for its reward. He takes it, generally, with financial sacrifice. He takes it in the same sort of way as people take voluntary offices, because they care about the things they are doing. They care about justice and doing justice, and if they feel, for a lot of subtle and indefinable reasons, that what they are doing is not justice as they understand it—that, because of the surrounding circumstances, the laws they are required to enforce are no longer laws which seem to them to be justice—that is really a decision which only they can take.
I do not think we ought to have any limitation of the discretion of the Secretary of State. But that does not act only in one way. As I have said, many people who take judicial office do so at a financial sacrifice. It is equally true, however, that when they give up this work in many instances they will not be making a financial sacrifice. That aspect, too, can be dealt with only by discretion. Many may return to practice at the Bar. A good many Indian judges have come back and are practising at the Bar. In financial terms they are probably far better off than they were as judges.
In exercising discretion about pensions, consideration should be given to what the man proposes to do, what he is doing, and whether the pension should be payable immediately or at some future date. From the professional viewpoint, many of these men are in the very prime of life. I urge the Secretary of State, therefore, in dealing with this matter, to have no limitation at all on his discretion; to deal with every individual case on its merits and to avoid particularly the growing up in his Department of a set of departmental rules which are not really justified by any statute and which will limit his discretion.

11.44 a.m.

Mr. Gammans: I hope I have understood aright the hon. and learned Member for Northampton (Mr. Paget). He seemed to start by making an amazing assertion when he said, on behalf of his party, that he felt the Government owed no obligation to humble people who had served the Government or the Provinces of India if they had no sort of contract of service. That really is an astounding assertion and one about which we on this side feel extremely strongly. These people did have an implied contract of service.

They knew perfectly well that if they behaved themselves they would go on serving the Government of India for the greater part of their natural lives. My hon. Friends on this side and I would feel extremely strongly if we in this country were to repudiate those obligations because of what is, after all, nothing more than a legal quibble.
The hon. and learned Member also seemed to imply that because some of the judges had the good fortune to come home to this country and go into lucrative practices, the amount of pensions they got should be adjudged accordingly. In other words, he is advocating a sort of means test for them. Is that what the right hon. Gentleman means?

Mr. Paget: I certainly do mean that. Here we have people retiring, for various reasons, long before pensionable age. Their earnings in that long interval before pensionable age certainly ought to be taken into consideration.

Mr. Gammans: It is good to know that that is what the hon. and learned Gentleman means. He—and, presumably, this applies to his party—has given us yet another example of the fact that they stand for the principle of the means test.

Mr. Ellis Smith: It applied to millions in this country.

Mr. Gammans: I want to ask the right hon. Gentleman to tell us a little more about the circumstances under which these pensions become payable by the Government of the United Kingdom. He said that negotiations had taken place with the Governments of India and Pakistan—and, I suppose, with the Government of Burma. Does he mean that he has asked these three Governments to pay the pensions and that they have refused? I cannot see why they should agree to pay the pensions of Indian civil servants and refuse to pay the pensions of judges. The same obligation exists in both cases. Is it due to bad or hasty drafting of the original Independence Bill, or is this something which was forgotten altogether?
Needless to say, I support the view that these judges should be paid pensions. Even although the sum involved is small, however, I think I am entitled to know why this charge should fall on the taxpayers of the United Kingdom. This


applies even more so to Burma. Burma has gone entirely out of the Commonwealth, yet when she went out of it we gave her, I think, £30 million. Recently we have agreed to transfer out of our own dollar resources a further £2 million to be made available for the Government of Burma. It is a little odd that this additional charge should fall upon the taxpayers of this country. I hope that when he replies the right hon. Gentleman will be rather more forthcoming on this point than he was in his introductory speech.

11.48 a.m.

Mr. P. Noel-Baker: I must thank the noble Lord and other hon. Members who have taken part in this Debate for the spirit in which they have spoken. I will begin, if I may, with the major point of principle which was raised by the noble Lord: why was there what he called a lacuna in the Indian Independence Bill, why was no provision made for retirement pensions and compensation for these judges? Another hon. Member suggested it was clear that His Majesty's Government were wrong in principle in failing to make that provision in the Act. What we did was done only after full consultation with the Viceroy, who gave the advice that it was not necessary or right to make provision for proportionate pensions or compensation.

Earl Winterton: I do not want to appear to be pernickety or priggish but, surely, it is most unusual for a representative of the Government to say that they acted solely on the advice of the Viceroy. The Viceroy is not responsible to this House for these men. The then Secretary of State was responsible.

Mr. Noel-Baker: Certainly, I am not at all trying to put responsibility on his shoulders, and not on ours. Of course the Government take the fullest responsibility. I am only making it clear that he gave those views and we were in agreement and came to the conclusion that it was right and, indeed, I still think so. In principle there has been no fundamental change in the position of the judges. The judiciary have maintained their independence of the Executive. I do not think any new situation of principle has arisen. There has been in the event a situation of fact which in some places, but not in others, has

made it seem desirable to certain judges that they should retire. When they have come to that conclusion, we have judged them to be right, and that it was in the interests of those for whom they were working in India and Pakistan, and of themselves, that they should retire.
I will give the figures of those who have retired, and those who have not retired. There are in question 10 barrister judges. Seven have decided to retire prematurely, and three have not. There are in question 13 I.C.S. judges. Three have decided to retire prematurely, and 10 have not. I think that shows that this is a situation of fact arising in certain places, which must be subject to decision in each particular case, on the merits of that case. I was asked by the
noble Lord what was to be the compensation given to barrister judges. That compensation is on a special scale, a scale which the Lord Chancellor regards as adequate. It is in fact more generous than that for I.C.S. judges. The details are set out in a written reply I gave to a Question on 16th November, and I think the noble Lord will find all he facts he desires at column 34 of the OFFICIAL REPORT on that date.
I was asked if this was retrospective; yes, it is retrospective and judges who have retired will, if this Bill is passed, receive benefits as from the date of their retirement. I understood the noble Lord to ask whether judges have been allowed to choose where they would serve. I cannot give a general answer, but I can say that judges in the Punjab and Bengal which were to be divided were given the choice of opting between India and Pakistan. It may be that in other areas judges were also given the choice, but I am afraid I have not the information. In those two cases, which were the most important because of the partition, the choice was given.
The noble Lord and another hon. Member asked whether any of these judges had been able to obtain other suitable employment which they might desire. Of the 10 who so far have decided to retire, I think it true to say that four have received new and suitable legal employment. I only know the facts in regard to two. One has become the legal adviser to our High Commissioner in India and another has been given a county court judgeship in this country.


I think the matter is progressing well and I have every hope that others will receive employment, if they desire it. I ought to add that we are not taking employment after retirement into consideration in fixing the pension.
I was asked what would be the cost to the Exchequer in the current year. If the Bill goes through, we estimate—we may be on the high side—that the maximum will be £6,000. In a full year the maximum would be about £10,000. I was also asked who is ultimately to decide in this delicate question of fact—and it is a very delicate question and every hon. Member will desire that we should not in any way be interfering with the loyalty of the judges to those who employ them—on the question of whether a judge is right to retire or not. In other words, whether he is to be entitled to the pension. I admit that the Bill does not make it very plain, but I think it is clear in constitutional practice that if there is to be someone with that ultimate authority, it should be the Secretary of State for Commonwealth Relations. I say, without hesitation, that so long as I hold that office, I shall have the greatest reluctance in calling in doubt reasons given by any judge. If a man is fit to be a judge and has to take this grave decision, everyone must respect the motives which have moved him and it would only be in the most exceptional cases that it would be called in question.

Earl Winterton: Because of the views expressed by hon. Gentlemen opposite, will the right hon. Gentleman consider, before the Committee stage, whether he could not agree to alter these words, because they do not satisfy us, in view of the changed conditions?

Mr. Noel-Baker: Yes, I shall be glad to have consultations with the noble Lord and my hon. Friend and to consider what would be the right language to use and, if necessary, to consider the introduction of an Amendment giving the ultimate power to the Secretary of State, or something of the kind. On that understanding, I hope the noble Lord will agree to the Bill being given a Second reading.
An argument was put forward based on the analogy between these judges and what were called the humbler ranks of the non-Secretary of State Civil Service——

Mr. Low: Before the right hon. Gentleman leaves that point, will he deal with the point I raised about the difference in language on the question of compensation?

Mr. Noel-Baker: I am advised that the difference of language makes no difference of fact and that the conditions will be substantially the same, but I will look into the matter further between now and the Committee stage and, if the hon. Member for North Blackpool (Mr. Low) cares to ask again then, I will give a fuller answer; but that is my present advice.
I do not think the case of the non-Secretary of State Civil Service and of these judges is at all analogous. Most hon. Members will consider from the statement I made yesterday that we are going very far to meet the claims of the members of the non-Secretary of State's Civil Services. In their terms of contract they have no right to retire on proportionate pension, or to compensation. They are now getting the right to retire on proportionate pension, which I think is a very considerable concession. I think the House will recognise that we have done a great deal in that way. In any case, I must reiterate that we do not accept the analogy.
I should like to end by echoing what was so appropriately said by the noble Lord when he paid tribute to all Members of the Indian Judiciary, both those born in the sub-Continent, and those who went there from Europe. Certainly the traditions of the judicial service in India have been one of its glories and I have every hope they will so remain.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Monday next.—[Mr. Wilkins.]

Orders of the Day — JUDGES PENSIONS (INDIA AND BURMA) [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).—(King's Recommendation signified.)

[Major MILNER in the Chair]

Resolved,
That, for the purposes of any Act of the present Session to provide for the payment out of moneys provided by Parliament of


pensions to certain persons who were serving as judges in India before the fifteenth day of August, one thousand nine hundred and forty-seven, or as judges in Burma before the fourth day of January, one thousand nine hundred and forty-eight, and for purposes connected with the matters aforesaid, it is expedient to authorise the payment out of moneys provided by Parliament of such sums as may be required for the payment of, or by way of commutation of the whole or any part of, any pension granted under that Act."—[Mr. P. Noel-Baker.]

Resolution to be reported upon Monday next.

Orders of the Day — COLONIAL LOANS BILL

Order for Second Reading read.

12.1 p.m.

The Under-Secretary of State for the Colonies (Mr. Rees-Williams): I beg to move, "That the Bill be now read a Second time."
The object of this Bill will, I am sure, commend itself to hon. Members and right hon. Members on both sides of the House. It is to give the Treasury authority to guarantee loans made to Colonial Governments by the International Bank for Reconstruction and Development. Owing to the Charter of the Bank it is only possible for this to be done on a guarantee of His Majesty's Government. This is because His Majesty's Government is a member of the Bank and because no Colonial Government is such a member. Article III, Section 4, of the Bank's Statute, reads as follows:
Conditions on which the Bank may guarantee or make loans.
(1) When the member in whose territories the project is located is not itself the borrower, the member or the central bank or some comparable agency of the member which is acceptable to the Bank, fully guarantees the repayment of the principal and the payment of interest and other charges of the loan.
It is because of that requirement that this Bill has been introduced.
This is an enabling Bill in the sense that it does not impose any obligations upon Colonial Governments, but enables them to obtain the advantages of a loan from the International Bank if they so

desire. Southern Rhodesia, which is not within the responsibilites of my right hon. Friend the Secretary of State for the Colonies, is, as the House will see, included in this Bill, in Clause 1 (7), at the request of the Southern Rhodesian Government.
The House will, perhaps, bear with me while I postulate some of the background of this Measure or at least show the setting in which it is placed. It is the object of the Government to encourage in every way possible the economic development of the Colonial territories. It may be said that there are four objectives in the economic policy in relation to the Colonies. The first is to restore and improve the capital equipment of the territories so as to provide a firm basis for future development. The second is to promote those types of economic activity, whether primary or industrial production, in which the territories are best fitted to engage, having regard to the balance of their economies, and the advantages of their external trade. The third objective is to raise the living standards of the Colonial peoples as rapidly as the level of their productivity permits. The fourth is to secure the mutual advantage of the United Kingdom and the Colonial territories, having regard to the finance, equipment and skill which the former may be able to provide.
Among the benefits to Colonial territories which this policy provides is, of course, that we are able to provide them with new and important potential sources of finance. I shall deal in more detail with that at a later stage but this is definitely one of those new and important potential sources of finance, helping to clear away obstacles placed in the way of achieving sound economic objectives. It will remove some economic obstacles which have so often, in the past, stood in the way of political advancement. In our view, there can be no sound political advancement which is not accompanied—and in my view Preceded—by economic, educational, social and health advancement.
The obstacles to progress which I have suggested are not merely financial obstacles; they are also material obstacles. As the House well knows, we are making every effort to overcome these obstacles by allocating a much greater quantity of steel than we have done in the past. In the current quarter it will be


about double the previous level of the steel allocation. After 1st January there will be an even greater improvement than that doubled allocation which the Colonies are now getting in this present quarter. There have also been considerable improvements recently in the supply of cement and particularly in the supply of textiles.

Mr. Ivor Thomas: In regard to steel, have the Government accepted the recommendation of the Select Committee on Estimates that there should be a specific allocation of steel for the Colonies?

Mr. Rees-Williams: We had been pressing for that for a considerable time before the Select Commitee's Report was issued, but it was a very useful confirmation of our point of view.
The Colonial Empire is at the moment a net dollar earner at the rate of about 200 million dollars a year, so that we can see that already the policy of His Majesty's Government is having a considerable effect. We shall no doubt be able to increase that net dollar earning in the future to a greater figure than it is at present.

Mr. Gammans: The hon. Gentleman speaks about the Government's policy. Surely, the Government are not taking credit for having planted all the rubber trees?

Mr. Rees-Williams: Rubber is by no means the only product. I would also say that His Majesty's Government can to some extent take some credit for the conditions under which that industry was able to get on to its feet so rapidly at the end of the Japanese occupation.
Our financial objective, arising out of the general economic objective to which I have referred, is to ensure that sufficient finance is available from within the Colonial territories and from external sources. There has in the past been great difficulty, not only in Colonial territories but also in metropolitan countries in which primary production is the main source of wealth, in obtaining a better standard of living and in achieving any sort of industrialisation.
There have in the main been only two ways in which a country such as that could obtain finance. The first was by

exploiting the primary producers, namely, the peasants; or, secondly, by obtaining foreign loans which inevitably—I am not saying improperly—meant that there had to be attached those conditions which are commonly known as "strings." During the last few years we have tried to provide funds for colonial territories without either exploiting the primary producer or by obtaining foreign loans on onerous conditions. We have tried to do it in several ways; first, owing to the price of primary commodities, which has been high since the war, by obtaining finance from surplus revenues, that is, by taxation by means of export duties and the like. Secondly, by making available to Colonial territories sums under the Colonial Development and Welfare Act which aggregate £120 million over the ten-year period up to 1956.
We have also, as the House knows, established the Colonial Development Corporation which we hope will provide a considerable amount of finance and skilled assistance to the Colonial territories. Lastly, we have made available the London market. The House will perhaps have seen that on 11th November the Trinidad £3 million loan was offered on the London market. It closed after one minute, and £80 million was offered for the £3 million that was required. Whilst the Colonies are asked to keep off the market as long as possible, under the present conditions we feel that they must be allowed access for financing development and other essential work for which other resources are not available. The hon. Member for Hornsey (Mr. Gammans) is, as usual, amused. I hope his amusement comes from the feeling that the Government's policy in relation to the Colonies is of such an outstanding character as to persuade investors to offer money at that rate to the Colonies on such a large scale.
In addition to the financial projects which I have mentioned there is also the possibility that European Co-operation Administration loans may be available. At the present time we have not negotiated any loan under this particular administration, but it may be possible that they will be negotiated at a later stage. As a matter of fact, we have asked for scientists and technicians under the European Co-operation Administration. Altogether we have asked for about 50 trained men, 25 geologists and about 25


ground surveyors under this project. Various other projects also are being suggested to the European Co-operation Administration in relation to the Colonies.
We do not anticipate that there will be any immediate request under this Bill, but we have introduced it now, not because there is any pressing need for it at the moment, but so that we shall be in a position to act promptly if it is required. The House knows that the Government always like to have the facilities which they desire to offer in good time, and not to be lagging behind. There is one main difficulty and one subsidiary difficulty at the moment under the Bank policy—not under the rules but under the policy—which might dissuade the Colonial Governments from applying for these loans. The first is the high rate of interest, which has recently been at 4½ per cent., including 1 per cent. commission which the bank takes on all loans. The second is that the dollar loans are only available for the purchase of equipment from dollar sources.
As the Colonies normally have a wide spread number of projects, with very few dollar requirements in respect of each project, it means that they would have to lump together a number of projects in order to make it worth while going to the bank for a dollar loan. We think that the borrowing could most conveniently be done through the Colonial Development Corporation. They can consolidate their requirements more easily than the Colonial Governments and preliminary contacts have been made between the directors of the Colonial Development Corporation and the Bank.
It is not necessary to include the Corporation in this Bill, because the Treasury have the power to guarantee loans made to the Corporation under the provisions of the Overseas Development Act. We feel that the object of the Bank, the purposes for which it was set up, are estimable. They intend to do all they can to restore world prosperity and trade, and I must pay tribute to the imaginative quality of those who set up the Bank to assist in this work. I hope it will be of real assistance to the Colonial territories over a number of years.
Clause 1 Subsection (1) of the Bill provides that the Treasury may, subject

to certain conditions, guarantee the payment of the principle and of the interest on any loan paid to the Government of a colonial territory by the International Bank. The amount of principle, as hon. Members will see, is limited to £50 million. This is, in fact, an estimate of the maximum aggregate sum required in the foreseeable future.
Clause 1 Subsection (2) states that the colonial government must satisfy the Secretary of State, with the concurrence of the Treasury, that the purpose of the loan is likely to promote development of the resources of the territory. So we have there the three parties, as it were, to be satisfied before any application is made—the Colonial Government, the Secretary of State for the Colonies and the Treasury.
Under Subsection (3) a guarantee shall not be given unless the Treasury and the Secretary of State are satisfied with regard to the financial provisions relating to the appropriation of the loan, sinking fund, charging of assets, and receiving of money to meet the charges.
Under Subsection (5) hon. Members will notice that after any guarantee is given the Treasury must lay a statement before each House. Subsection (6) states that the Treasury must at certain stated intervals lay before the House a statement relating to the sum or sums guaranteed. Subsection (7) defines the term, "colonial territory". It is defined as including colonies, protectorates, protected states and trusteeship territories. I must apologise for an error which many hon. Members have no doubt noticed in the Explanatory and Financial Memorandum. In the second line of the second paragraph the Subsection there indicated should read "(7)" instead of "(5)".
I ask the House to give a Second Reading to this Bill, which has the admirable purposes that I have already indicated.

12.18 p.m.

Earl Winterton: This Bill raises very large issues indeed. In fact, I venture to think it would be in Order on it to discuss the whole question of Colonial development, but the House will be glad to know that I do not propose to do that this afternoon. I have one or two observations to make on what we may call the main principle behind the Bill. Before doing so, in accordance with


custom, I must disclose an interest. I happen to be a large landowner in one of the Colonies which may be affected by this Bill 
I was very glad that my hon. Friend the Member for Hornsey (Mr. Gammans) made the interruption which he did during the speech of the Under-Secretary of State for the Colonies. To judge from some people, it is only in the last two or three years, since this Government came into office, that there has been any development in the Colonies or any loans at all to the Colonies to carry out their development. That is complete and absolute nonsense. There have been development loans to the Colonies for at least the last 25 years.
Anyone who has visited practically every Colony in Africa, as I have, would testify to the fact that from 1920 onwards there was enormous development in the African Colonies alone, and this Bill is intended to continue that development. Further to that point, I would say that there is a fantastic delusion which really demands the attention of the next psychiatrist conference; in fact it might form the principle subject for discussion by that conference. It is a delusion which is confined to my noble Friend in another place Lord Beaverbrook, and the present Government, that until they came into office nobody ever heard of the Colonies, nobody ever did anything for the Colonies, and nothing had ever been produced from the Colonies. I must not get on the subject of psychiatry, but I am very interested in it. I would make an appeal for a distinguished psychiatrist to go into this matter to find out how to eradicate the roots of this delusion from both the Government and the noble Lord. In carrying out that task he would be doing a most valuable thing for science. I am sure that the Under-Secretary would lend himself to examination very readily. Whether Lord Beaver-brook would is another Matter.
There was one delicious observation made by the hon. Gentleman in reply to the interruption of my hon. Friend the Member for Hornsey. When a reference was made to the question of rubber—I think I have got his words right—he said that the Government could take credit to themselves that the rubber industry had so rapidly got on to its feet. Do the

Government also take credit to themselves for a totally unnecessary rebellion in Malaya which was due to the incapacity of the Government? Does the hon. Gentleman, who commends himself always to us on this side of the House by his smiling affability and his complete belief in his own powers and those of the Government, also take credit to himself for that rebellion?

Mr. Rees-Williams: The trouble in Malaya is due to world-wide Communism. The Government do not take credit for that. Since the war ended the Government, in most difficult circumstances, have done a large amount of good in Malaya.

Earl Winterton: We must not argue that or else both the hon. Gentleman and myself will get into trouble. That is not the view on this side of the House. The view we hold is that the worst Government to deal with Communism is a Socialist Government. We need only look at what has happened in Europe for confirmation of that fact.
No one who made an extended tour of the Colonies before the war as I did, could deny the immense amount of development taking place. We welcome this Bill because it is one of the means of continuing and indeed of extending that development. Of course, in effect, as the hon. Gentleman truly said, the purpose of this Bill is to enable us to obtain dollars. That is one of the principal effects of the Bill, and I think that is perfectly right and proper.
Having dealt with the more controversial part of my speech, I come to the points where I think I agree with the hon. Gentleman. I believe the hon. Gentleman will agree that we as a nation welcome American participation in the development of British Colonies. This Bill is one means of obtaining it. I hope that it will not have the defect of deterring British manufacturers from producing and supplying in large quantities certain machinery which is required for development in Colonial countries. Though the matter does not immediately arise, both sides of the House would be glad if the hon. Gentleman would give an assurance that everything possible will be done to enter into long-term contracts with manufacturers of British machinery which is required in the Colonies.

Sir Arthur Salter: Of course, the noble Lord will realise that one of the great advantages of American money—and it is very largely American money in this Bank—being used for this purpose is that, under the statute of the Bank, money lent by it is in no way tied to the provision of goods from a particular country, so that it is available for expenditure on goods imported into the Colonies from this country.

Earl Winterton: Yes. I am grateful for that interruption. I was aware of that fact and I should have made it clear. What I was suggesting—and I would say that my right hon. Friend the Member for Oxford University (Sir A. Salter) would be in entire agreement with me—is that it is an excellent thing for us to give the impression that we welcome American participation in these development schemes but that, in that participation, so far as the provision of machinery is concerned, we must have fair shares. Very properly, Clause 1 sets a limit to the amount of money which can be borrowed. I am sure that the Under-Secretary will agree that it is necessary that his Department should keep a careful eye on the requirements submitted by the Colonies in order to see that a proper balance is kept. Unless that is done, it might be found that some Colonies got too much and others got too little. For instance, it might easily happen that one Colonial Government might get off the mark rather quickly, thinking that if they got in their application first they would be more likely to get the money, and other Colonial Governments might want to consult local opinion and to prepare their case more thoroughly.
Clause 1 (2) refers to the purpose of the loan. It states:
No loan shall be guaranteed under this Act unless the purpose of the loan is approved by the Secretary of State … as likely to promote the development of the resources of the colonial territory concerned.
I hope here that I shall not be in conflict with hon. Gentlemen opposite. There is no reason why I should be, because no party question arises. I suggest that these loans should be used primarily to develop the economic resources of Colonial territories. It is admitted by all of us that many Colonies have very backward social systems. Obviously

they require improvement, but it would be a case of putting the cart before the horse to spend money on social improvements before there is established an economic background which will make those social improvements possible. This should be a Bill to develop the economic resources of the Colonies for the benefit of the Colonies, including the poorest paid inhabitants.
I wish to make one point with regard to Subsection (3), where the conditions are laid down. One of those conditions is that the Treasury should satisfy itself as to the general financial position of a Colony which wishes to borrow. The hope we express on this side of the House is that the Treasury will be content with a general survey of a Colony's finances and that this Clause will not impose too much of what is known as Treasury control in the accepted sense of the term. Any hon. Members who have visited the Colonies will know how—in the past at any rate and for all I know at present—terrible difficulties have been caused for Colonial treasurers who often find annoying conditions laid down in respect of money loaned to them. I have known instances where things ought to have been done and could not be done because of conditions laid down. I hope, therefore, that this will not mean Treasury control in the accepted sense of the term.
We accept this Bill in principle. We are glad that it has been brought forward. We hope that it will prove beneficial to the Colonies and that it will be another step in the long, carefully constructed road—a road which has existed far longer than hon. Gentlemen opposite would care to admit—in the development of the Colonial possessions of the British Empire.

12.29 p.m.

Mr. H. D. Hughes: I hope that in the interests of His Majesty's Opposition the clearly stated division of opinion between the noble Lord the Member for Horsham (Earl Winterton) and the noble Lord in another place will be resolved at an early date. We on this side of the House are well aware of Lord Beaverbrook's well known prejudices in favour of this Government which naturally discount any tribute that he cares to pay in the columns of the "Daily Express" to our Colonial policy.

Earl Winterton: If the hon. Gentleman thinks that Lord Beaverbrook is a supporter of the Conservative Party he had better think again. If he thinks that Lord Beaverbrook is a supporter of the Conservative Party he also needs to see a psychiatrist.

Mr. Hughes: Whatever views Lord Beaverbrook may hold about the Opposition, I think it is quite clear that he has considerable reservations on His Majesty's Government, and, therefore, when he does pay a tribute to the Government, that tribute carries all the more weight coming from that particular source. While admitting that, obviously, there has been Colonial development in the past, any unprejudiced observer will admit that the scale of Colonial development in these territories in the last three years, while the present Government have been in office, has been far greater and more progressive and imaginative than in the period between the wars.
We on this side of the House welcome this Bill. We recognise that, in addition to the great efforts already made by the present Government, there is still much room for further development and expansion, and I particularly welcome the very encouraging news which the Under-Secretary has given us about steel expansion. I hope that the Report of the Select Committee has had some part in stimulating and expediting the Government's action in raising the steel allocation to the Colonies. The position in the Colonies today is that the limitation on development is not primarily one of finance. It is at this stage primarily one of materials, and skilled and technical man-power, and that is the reason why this Bill will remain for the time being an enabling Bill.
Having said that, I will add that it is also quite clear that the present limitations on dollar expenditure have been seriously affecting some Colonial territories. I quote the answer given by the Financial Secretary to the Government of Nigeria to the Select Committee, when he was asked, on this specific point, whether steps have been taken by the Nigerian Government to make application to the International Bank for Reconstruction. The answer he gave was:
We have been informed that a dollar ceiling has been imposed for the whole of the Colonial Empire and that the ceiling for

Nigeria is x dollars. We have fought and are still fighting for that to be increased, because we have a lot of leeway to make up, and with orders placed and import licences having been approved the stuff has not yet come forward, and we regard it as absolutely imperative that we should have a higher allocation of dollars.
It is quite clear that though the chief limitation on Colonial development at present is not financial, that the dollar limitation is quite serious. As the Undersecretary said, the Colonial territories are net dollar importers, and I therefore hope that they are going to get a fair share of the dollars available from the general sterling area pool to help them to overcome their difficulties. Their financial requirements are enormous. To take the case of Nigeria at the present time, under the ten-year plan outlined in the Colonial Development and Welfare scheme, the amount of capital expenditure provided for is only 5s. per head of the population per year. Obviously, that amount of capital expenditure does not go very far to meet the great needs of an undeveloped territory of that kind.
Colonial development is precisely the kind of purpose for which the International Bank was set up, and, looking at its third annual Report, it is clear that there are considerable sums of money available now that could be used, but the only development loan which has so far been made is a loan to Chile. Ninety per cent, of the money available is from American sources, but I think we ought to be clear that money from the Bank offered in this way does not mean, as the noble Lord seems to think, that we are asking for direct American participation. It is true that the Bank is primarily financed from American sources, but it is an international institution under international control, and I am sure that the American representatives on the Bank would be the first to recognise that.
The Under-Secretary pointed to a very real difficulty about using the Bank as a source of finance, and that is the question of the rate of interest. The rate of interest on E.C.A. loans is 2½ per cent, whereas loans coming from the Bank, if we allow for commission, are at the rate of 4½ per cent. I do not know what is the rate of interest on the Trinidad Loan—

Sir William Darling: Three per cent.

Mr. Hughes: Until the Bank can cut down the rate of interest on money advanced to these undeveloped territories, this available source of finance is not going to be used to anything like the extent that it should be.
I should like to ask the Under-Secretary what are the detailed arrangements for repayment of these loans. There are various clauses in the Statute setting up the International Bank providing for different types of loan, which provide for direct loans to members, for making or participating in loans raised in the markets of members, or guaranteeing in whole or in part loans made by private investors through the usual investment channels. I am not clear if this Bill enables us to ask for financial assistance under all those three Subsections. Then there are various escape Clauses in Article IV, which provide that, in certain circumstances, territories may receive dollar loans which they can repay in other currencies.
Is it the view of the Colonial Office or the Treasury that we may, in this way, be able to get for the Colonial territories dollar loans which we shall have to repay, not in dollars, but possibly in sterling? Can we have any help on that point? Another question was raised by the Under-Secretary when he said that dollar loans would only be available for use in dollar areas.

Mr. Rees-Williams: They will only be used for dollar requirements—for dollar purposes in any of the areas.

Mr. Hughes: I want to draw attention to the terms of the Statute——

Mr. Rees-Williams: Let us get this quite clear. The loans will be used in the sterling area because all these territories are in the sterling area, but the form of the loan must be in dollars. It is not part of the statute of the Bank, but part of the policy of the Bank.

Mr. Hughes: Article III (5) provides that the Bank shall impose no conditions that the proceeds of a loan shall be spent in the territories of any particular member or members. That, I think, meets the point raised by the noble Lord.
What type of loan is the Bank likely to give? In the third annual report, a most interesting and instructive document, they

say that this kind of finance will be least necessary for the production and processing of primary materials and for the development of light manufacturing industries. In other words, this kind of finance will be less readily available where there is hope of private investment, but it is precisely for the development of primary and processing industries, that many of the Colonial territories must urgently need financial assistance. The Colonial Development and Welfare money is going to be used in the provision of social services and the basic economic developments that are required. What is really needed in addition is finance which will be available for building up secondary industries, and so on. I hope that the Bank, in considering any application that may come forward from the Colonial territories, will not rule out finance for this kind of project, which is extremely important.
As I understand my hon. Friend, this is but a preliminary Measure. I had intended to ask whether any applications had been put to the Colonial Office by Colonial Governments for this sort of finance, and what stage such applications had got to—whether any applications had been approved by the Colonial Office, and if there had been preliminary consultations with the Bank. There is a fairly long and detailed procedure set out whereby the Bank itself goes in for pretty elaborate investigations in the territories for which loans are required. A considerable time would elapse, it seems to me, before money was actually made available, after the time at which a Colonial Government first put forward a suggestion. So even if finance is not needed immediately, it may be a good idea to get a project started right now.
The Bank also is able to provide technical assistance and independent experts at the request of members for development schemes. The Under-Secretary mentioned getting technical assistance and independent experts through the European Co-operation Agreement. I should like to know whether an approach has been made, or is contemplated to be made, to the Bank, to assist Colonial territories in their desperate shortage at the present time of technical assistance and independent experts. One difficulty we may come up against is that shortages of equipment


and materials which are needed in the Colonial territories are as serious in the dollar area as they are in the sterling area. Therefore, while the finance may be forthcoming it may not assist very much the type of development we have in mind.
Finally, I should like to draw attention to a very significant sentence in the third annual report of the International Bank. It says:
Any development programme, if it is to have the necessary popular and governmental support, must emerge from the thinking of the responsible leaders of the country itself.
I want to underline that. In our development projects we are increasingly trying to bring in local Colonial opinion at an early stage in discussing development projects, and I am sure that that is absolutely vital to the success of all kinds of development projects. We have to get the assistance, and co-operation of the responsible leaders of the Colonial peoples themselves, even where they have not yet reached a high stage of political self government. I hope, therefore, that in the consideration of any projects under this Bill, that will be borne very much in mind.

12.44 p.m.

Mr. Ivor Thomas: This is a short Bill, but it raises most important questions which ought to receive a searching examination from the House before it is given, as I think it will be given with general approval, a Second Reading. As the noble Lord the Member for Horsham (Earl Winterton) has already recognised, some of the most important questions in Colonial development are raised by this Bill; and I agree very much with almost the whole of the most thoughtful speech of the hon. Member for West Wolverhampton (Mr. H. D. Hughes). Anybody who has anything to do with the Colonies will admit, I think, that the most urgent need at the present time is the capital development of the Colonies, and I so much agree with the Under-Secretary that this capital development is the prerequisite, or, at any rate, ought to be the accompaniment, of constitutional, social, and educational advance. At the present time constitutional advance has outstripped economical development, and we

need a very great economic development to restore the balance.
In the past that economic development was undertaken by private enterprise
on a very large scale, to which due recognition has not been given. I shall leave it to the hon. Member for Maldon (Mr. Driberg) who, I think, is trying to catch your eye, Mr. Speaker, to tell us the degree of Lord Beaverbrook's support for the Government. But I should myself like to say that private investment in the past has done a most remarkable work in the Colonial territories. It has done that work without asking for a guarantee, such as the International Bank is securing under this Bill. It has done so without asking for 4½ per cent. interest on its investment, and has often gone without any return for many years on end. However, it has become more and more difficult for private enterprise to undertake that work. The reason is quite simple. It is the high taxation which is being pursued in this country, and which is having serious consequences both here and in the economic development of the Colonies.
There is only one source at the present time from which that capital investment in the Colonies can come. If we face the facts we know that that source must be the United States of America. The question of whether American participation in the development of the Colonies ought to be welcomed is one that has exercised a good many people; and for this reason, that the United States has tended to embrace principles which would, in fact, hamper development of our Colonial territories. We all know, I think, that our recovery here is based on three things, the development of home agriculture, of our invisible exports, and of our Colonial resources; and the Government appear to many of us to have gone rather a long way in the Geneva and Havana agreements towards accepting principles, originating in America, which would tend to hamper Colonial development.
If the United States is to participate in Colonial development the best way in which it can be done is the way in which it is being done under this Bill; that is, through the International Bank. As the hon. Member for West Wolverhampton has just stated, the greater part of the Bank's resources, do, in fact, come from


American funds. The third report which, like him, I have been studying, says:
The different funds available to the Bank for lending have come very largely from United States sources.
In fact, of the 992,500,000 dollars available for lending not less than 635 million dollars comes from the 20 per cent. paid-in portion of the subscription of the United States.
The next question that arises is the attitude of the International Bank towards Colonial development. How will it use the £50 million for which we are seeking a guarantee under this Bill? I think we have very satisfactory answers to that question in the third report of the Bank. The hon. Member for West Wolverhampton has read one quotation from it, and I should like to make another, which is, I think, relevant. The third report says:
In formulating its policies with respect to furnishing advice to its member governments, the Bank has borne in mind that it must avoid any gratuitous interference in the internal affairs of any country, or the assumption of financial or other commitments it cannot fulfil, or too deep an involvement in the details of a particular program.
That seems to me a very wise approach for such an international organisation to make, and, incidentally, an approach which I should expect from a body which has as the chairman of its advisory council my right hon. Friend the Senior Burgess for Oxford University (Sir A. Salter).
I think the third report also enables us to see the uses to which this £50 million may be put. The bank in its very thoughtful report outlines two types of investment in the Colonies. One, as the hon. Member for West Wolverhampton has just said, is the production and processing of primary materials, and the other is the development of light manufacturing industries. The report goes on to say, and I should like to make this quotation as I believe it answers the question of the noble Lord the Member for Horsham as to how this money will be used:
Some other fields of investment which are equally essential to well-balanced development may frequently be less attractive to private capital, either because of the size of the investment required, or the smallness or uncertainty of the returns, or the prospect of Government intervention or control. Large irrigation and reclamation projects, public utilities, health and training programs and migration schemes

are likely to be subject to these difficulties. While many investments made by private capital in the past have been in transportation, communications and power facilities and additional investments may be anticipated, the trends of recent years suggest that this is the type of development that is most apt to require assistance from the Bank, either in the form of direct loans or through guarantees.
A very interesting point to me, as I am sure it will be to the Under-Secretary, who has so much to do with the Colonial Development and Welfare Fund, is that this report, and particularly that part which I have just quoted, bears out strongly the wisdom of the administration of our own Colonial and Development Fund. It is precisely on this type of project that the £120 million which we are making available out of United Kingdom resources for Colonial development is being spent.
There are certain other lines of policy laid down by the Bank which I think ought also to be brought to the notice of the House. They seem to me to be very wise. The third report says that the Bank should favour the application of the limited supplies of capital to projects which will result in the greatest increase in production and trade in relation to the size of the investment, and it also says this—which I am sure will have the support of the noble Lord:
The extensive capital required for all of these purposes emphasises the need for application of the remaining capital to immediately productive uses rather than to premature or disproportionate development of heavy industries.
Thanks to the Treasury guarantee, this Bill adds another £50 million to the sums which have been made available for Colonial development. We have had £120 million from the Colonial Development Welfare Fund which, when supplemented by local resources, will amount to £350 million. We have £150 million made available under the Overseas Resources Bill, most of it for Colonial territories, and we now have this additional £50 million. This is very welcome and, as I hope I have shown, it is not tied up with what the Under-Secretary called strings. However, do not let any of us think that this will solve all the problems of the Colonial territories. The needs of the Colonial territories are to be measured in thousands of millions of pounds. Nevertheless, within its limits, this is a most useful Bill, and I hope the


House will give it a unanimous Second Reading.

12.54 p.m.

Mr. Gammans: I have a great personal regard for the Under-Secretary, as he knows, and I refuse to believe that he is as simple as he pretends to be when he talks about the success of the Trinidad loan. Has he not thought that possibly one of the reasons why it was over-subscribed was not so much people's faith in the stability of the Government as their desire to get their money out of the country? If he doubts the assertion, he might contrast people's anxiety to invest money in' Trinidad with their reluctance to invest money in the National Savings Movement in this country.

Mr. Rees-Williams: I am grateful to the hon. Gentleman for giving way. I would simply say that when the tree falls so do the branches.

Mr. Gammans: Maybe, but still the money would, in fact, be in Trinidad.
Hon. Members opposite must forgive me if I support this Bill with a certain amount of cynical amusement, because all my life I have listened to Socialists beating their breasts unctuously about what they call Colonial exploitation. Colonial exploitation is only another way of saying investing outside capital in a particular Colony. Here we have it in full measure—not merely British money but money which is largely American, capital which has been gained by private enterprise, and also the profit motive. So the wheel has turned a full circle. The hon. Gentleman is rather like the secretary of a Band of Hope who has been offered a substantial donation by the Licensed Victuallers' Association and wonders whther he should accept it. However, he has wrestled with his conscience and has gone round to the nearest pub and pocketed the cheque. Well, we live and learn; some of us have to live a very long time before we learn.
The truth is that the Colonies need capital. They need all they can get, and the interesting thing is that those Colonial territories which have succeeded in
attracting the largest amount of outside capital enjoy the highest standard of living, and those which have the least

outside capital have the lowest standard of living. We are short of capital ourselves, and so we very much welcome this opportunity of getting capital from another source.
I hope the hon. Gentleman can give us real assurances that there are no strings whatever tied to these loans. I hope he can assure us that any money we may borrow from this Bank has no connection whatever with, say, stock piling in the United States or rearmament or anything of that sort, and that any Colony which needs outside capital can come along to this Bank, through the Colonial Office, and make a claim for the capital. There is, of course, the danger to which the hon. Member for Keighley (Mr. Ivor Thomas) referred, of mixing up the functions of State loans, whether they come from this country or from the International Bank, and private investments. I hope the House will keep the difference very clearly in mind. To my mind, the function of these State loans is primarily for capital development, including roads, railways, aerodromes, things like mineral surveys and so on.
I hope, too, that the hon. Gentleman will tell us if at this stage he has any ideas in his mind as to which Colonies may ask for loans from the International Bank. Is he thinking of British Guiana or British Honduras, or the growing of rice in Borneo and the Far Eastern territories, or is it that today he is merely thinking of providing facilities without having any definite schemes in mind? There is the danger which we ought to face, that these State loans may discourage private enterprise from investing their money as well. I know the hon. Gentleman feels that the only true development started about three and a half years ago, and unless he is going to freeze off all private enterprise and say "I do not want you at all," he should be a little more careful in his reading of history and a little more gracious in the invitation which he extends to private enterprise in future. Otherwise, he will not get it.
What we want is the greatest amount of capital in the Colonial Empire, whether it comes from this country or from private sources or locally, provided it fits in with one or two principles. The first principle is that the sort of development that private enterprise wants to undertake should be in accordance with


the general economic plans of the particular Colony; that it should pay its fair share of taxes, including in the case of mining, reinstatement of land; the realisation that mining is a wasting asset; and, in the case of loans from non-sterling areas, investors must realise that there may be limitations on the transfer of their dividends into hard currencies, and lastly that private enterprise shows itself an ideal employer.
We on this side of the House gave our support to the Groundnut Scheme in East Africa, but we recognise that there are dangers which are shown in this Bill, including the danger which I have mentioned of freezing out private enterprise. There is also the political danger which I do not think the Under-Secretary has fully appreciated; here for the first time are His Majesty's Government exploiting a Colonial territory direct. He will have to be extremely eloquent in due course if he can persuade the people of East Africa that this is not being done primarily for the benefit of the people of this country who will want the food which that scheme is going to produce. Up to now, the Colonial Office has always been, as it were, the judge standing in an intermediary position between capital and the people of the country. Now they have become the exploiters themselves. I warn the hon. Gentleman that political agitators in a Colony would put a very different interpretation on that form of enterprise from that which the hon. Gentleman would wish.

Mr. Rees-Williams: Is the hon. Gentleman referring to the Groundnut Scheme? He will remember that in the Overseas Resources Bill, when we used something of the argument which he is now using, the hon. Gentleman was one of those who wanted the Overseas Food Corporation to come directly under the Colonial Office and not under the Ministry of Food.

Mr. Gammans: That was because I thought the Colonial Office would be in a better position to deal with the sort of criticism which I have raised than would be the Ministry of Food. I want to say a final word about Subsection (3). This deals with the financial standing of a Colony. I hope that the House will agree that it is impossible to divorce the financial standing of a Colony from its political stability. After what has hap-

pened in Malaya, the International Bank and the American taxpayer will need a lot of assurance that His Majesty's Government are capable of maintaining order; the hon. Gentleman may see that the same thing is likely to happen in Cyprus. I warn the hon. Gentleman that if there is a Communist uprising or Communist trouble in Cyprus, it will be no use just sending out some well-meaning simpleton from the T.U.C. to try to argue with the local people on how to run a trade union.
After all, Lord Trefgarne has warned us and the Government of the danger of sinking money in a Colony which makes known its intention of clearing out of the Empire at the earliest possible moment. After what has happened in Burma, I quite see the point of his warning, because Burma has certainly done very well out of its disloyalty to the Crown. It has got out of paying its war damage liabilities; it has expropriated the assets of British companies and, if I may put it this way, it has out-Daltoned the ex-Chancellor of the Exchequer in the terms which it has paid to companies which have been taken over. We have given them £30 million, and now we have loaned them another £2 million of our dollar resources. If the Colonies feel that they can do as well out of being disloyal as they can out of being loyal, we do not get the conditions under which this money can safely be loaned.
In welcoming this Bill, I think that we ought to pay tribute not only to the Bank, but to its largest shareholder, the United States, for their great farsightedness in helping us at this time. Hon. Members opposite may say that that help arises out of a mixture of idealism and also of enlightened self-interest. That may be so. If all human affairs were governed by enlightened self-interest the world would be a much better place in which to live than it is today. I think that perhaps history may show that the fact that the United States did not go isolationist after the second world war, either politically or economically, may turn out to be the greatest single event of this century. Here we see one other example of it in their attitude towards us and our own Colonies, and it is for that reason that, with the reservation which I have made, I entirely support the Bill.

1.5 p.m.

Mr. Harold Davies: I am sure that, despite the cynicism of the hon. Member for Hornsey (Mr. Gammans), in the main, he agrees with this Bill. What are we setting out to do? In reality the great British public are guaranteeing directly and indirectly another loan of £50 million which will come through the International Bank. While, as the right hon. Member for Horsham (Earl Winterton) said, it would be quite in order to spread that over the Colonial areas, it would be wrong of me to extend my talk on that subject for more than a few minutes today, but I hope that in the near future we shall have the opportunity for a full Debate on the position of the Colonies, because there are certain aspects of trade in the Pacific of which I think this House should take note.
I should like to know what will be the kind of development envisaged in the Pacific area, especially after the Japanese trade agreement in connection with which we have acknowledged that there will be a 3½ times expansion of Japanese trade. None of us desires to keep the Japanese people below the subsistence level, but unless we have some coherent and parallel development of economic and trade policies in the Pacific Basin, then whatever policies we may build up for our Colonial territories in South East Asia they are likely to be destroyed because of lack of co-operation.
I deprecate the fact that many Members in this House are becoming hypnotised by United States commercial power. I hope that it will be realised—and the hon. Member for Hornsey (Mr. Gammans) was, I believe, present at the Empire Parliamentary Conference during the Recess when we had delegates from overseas—that it was demonstrated by representatives of the Colonies that it was quite possible, despite the shortage of raw materials and of machinery, to make new purchases and to achieve new output targets. One of the things that would help towards this would be for the Labour Government to kill this horrible job snobbery which exists in the Colonies.
I do not want to enter into the cut and thrust of Debate, and I do not desire to take up the remarks of the right hon. Member for Horsham about Communism in Malaya; but it is not Communism in the main which is the cause of the trouble

in Malaya and South East Asia; it is shortage of rice and other food, and political groups have taken the opportunity of exploiting this shortage. The repeated assertion that it is Communism all the time which is the cause of the trouble is now growing nauseating, and is not in strict accordance with the real economic facts of that country.
What we should try to do with these loans—and I was glad to hear the hon. Member for West Wolverhampton (Mr. H. D. Hughes) mentioned it indirectly—is to kill some of this job snobbery in the Colonies. Cannot it be used to send out British workers—men who have not degrees but ordinary decent bricklayers and men of that kind—men who can lay a road without knowing about road instruments—who would be of tremendous value. I do not want to accuse anyone of saying that in the past the Colonies existed for the public school man, but the Colonies hitherto seem, to have existed for the type of man with higher academic or technical education. Cannot we now push into the Colonies people possessed of our own British skill, who can help the people around them, and cannot these loans be used for this type of development?

Mr. Gammans: Does the hon. Gentleman suggest that people should be pushed into the Colonies without any qualifications? Is he saying that an engineer should not have degrees and that we should push in a bricklayer because he is a bricklayer?

Mr. Davies: No, let us be reasonable about this. We want to encourage these people. What is the good of the engineer if we have not the men of skilled labour below the level of the engineer? I suggest that as well as sending doctors to the Colonies, which is almost an impossibility in view of the great shortage of doctors in the world today, we should seek to develop the health services by maternity and welfare work. If we have to find university graduates, engineers and doctors to develop the Colonies, then we shall have to wait for at least 60 years. I am suggesting that we should break down this job snobbery and get on with development on these lines. We have filled the Colonies with babu types. There is nothing worse in the Colonies than the de-classed native, the native who when he is taught to pen-push is wanted


neither by his own people nor by the white people. What we want to see is a manly type of labour to develop the Colonies on both the economic and social sides.
Under the agreement signed last November, the Colonies reduced their preference margin on imported goods from non-Empire countries by £4.2 million, measured in terms of 1938 trade. This country must stand up to the pressure of the United States in our trade agreements. The tragedies and troubles in Malaya have been largely caused by the low price of rubber. While our development plans are bound to be affected by the dollar crisis, we might as well see, while being fully prepared to co-operate with any country that wants to develop the Colonies, that we get the maximum possible prices during this transitional stage in the economic life of the Colonies.
For the first time some of the Colonial people are meeting a new money problem. The circulation of money in Jamaica has increased by more than 2,000 per cent., and in West Africa it has increased by 165 per cent. In these circumstances, it is essential that there should be consumer goods available to mop up any inflationary pressure which must ultimately lead to a lower standard of living for the people. I agree with the hon. Member for Hornsey (Mr. Gammans) that we should not read too much into this Bill. It is for us to watch the development of the Colonies, and in this connection I hope that in the near future the House will have the opportunity of a three-day Debate to discuss the economic, social and political development in relation to the Marshall Plan and the plans of this country.

1.15 p.m.

Sir William Darling: The hon. Member for Leek (Mr. Harold Davies) has given us a very interesting impression of his Colonial experiences. I would remind him, however, that for the past 20, 40 and 100 years European manual workers have been going to the Colonies. How, for instance, does he think a rubber plantation is set up? Is it done by coolie labour? Does the planter have nothing to do with the arrangement of his plantation? Then what about irrigation?

Mr. Harold Davies: The hon. Member is completely misinterpreting what I said.

I did not say that British skilled labour had not gone out to the Colonies in the past, but that we needed to break down the job snobbery which existed in the past.

Sir W. Darling: I lived in the Colonies for a number of years, and I was not conscious of this job snobbery which has caught the fleeting glance of the hon. Member; but perhaps, like many others, I lived in a world without it, and the occasional visitor sees more of it. The tea plantations and the great irrigation works of India and Ceylon were not constructed or built up by the class of person he has in mind. The hon. Member has a picture of an English public school boy going out to do this work, living a life unassociated and detached from the people.
The Government are extremely good at producing Bills of this character. Last week we had a Scottish Water Bill which envisaged water development in Scotland for the next 50 years at a cost of £20 million; and today we have a Bill which envisages development in the Colonies over the next 20 years at a cost of £50 million. Not only do the Government nobble the past and seize the present, but they face the future by drawing an increasing number of blank cheques which they will not be expected to redeem. I am surprised that the financial experts who support the Government are not here this morning. We find that the Government are now borrowing money at 4½ per cent. It shows that when the Government's cheap money policy comes up against the hard facts of reality it disappears into nothingness. I voted against the American Loan for the very reason that it inevitably leads us to this kind of finance. I am not in any way opposed to America advancing capital, but it is for the Socialist Government to be reminded that in order to secure Colonial development, their cheap money policy is defeated and they have to go overseas and pay 4½ per cent., with 1 per cent. banker's commission.

Sir A. Salter: The 4½ per cent. includes the banker's commission.

Sir W. Darling: There is an addition to the 4½ per cent. in one of the Clauses.

Mr. Rees-Williams: The banker's commission is 1 per cent. and the interest 3½ per cent., making a total of 4½ per cent.

Sir. W. Darling: I accept the correction, but 4½ per cent. is very different from 2½ per cent. I suggest that inevitably as a result of the Government's policy there will be an immense amount of dis-investment. The private enterprises which are being taken over will free a great amount of capital on the home market, and the weight of investment will be very considerable. Indeed, that has already been proved by the weight of investment in the Trinidad loan. Is the main prop of our Colonial development to be loans from the International Bank of Reconstruction rather than use of the machinery of the finance market in the United Kingdom? Has the finance market in the United Kingdom proved insufficient, and are the Government satisfied that they cannot raise the finance over the period when they are likely to require it? Is Trinidad a single exception, or is it to be tripled or quadrupled over the whole field?
I suggest that before we commit ourselves to a £50 million loan, of which 35 per cent. will be supplied by the United States, and 15 per cent. by our subscription, and the rest by others as the sheet anchor of Colonial development, we should look to our own resources. They are probably freer than they have ever been, and we must remember that ultimately, finance controls industry whatever the qualifications. Ultimately the placing of this loan largely on American finance, will inevitably condition for many reasons but for the main reason that it is American finance, the market for which these goods and services are purchased. It may be a good thing, but it is not a good thing for a Socialist Government, which is preaching a cheap money policy and is now prating about Colonial development, to tie their policy to such potentialities. So while sharing all the hopes of His Majesty's Government that this loan will bring about all the conditions they properly anticipate, I would ask them to think again, and I would offer a dissenting note about the wisdom of offering themselves to the extent of £50 million in an international loan.

1.21 p.m.

Mr. Driberg: These semiprivate Friday Debates are always most interesting when the noble Lord the Member for Horsham (Earl Winterton) is in one of his more provocative moods, and

he certainly entertained us admirably this afternoon. I am sorry that he has had to leave us, because I propose to respond to the invitation of the hon. Member for Keighley (Mr. Ivor Thomas) and clear up so far as I can the noble Lord's anxieties about the position of his noble Friend, Lord Beaverbrook, vis-à-vis His Majesty's Government. It can be done in one sentence. The position is perfectly simple. Lord Beaverbrook has two main objects in life: first, to harass the Labour Government; and secondly, to embarrass the Conservative Party. He enjoys himself enormously doing both.
It was evident from some of the noble Lord's remarks and some of those of the hon. Member for Hornsey (Mr. Gammans) that the Conservatives are now becoming extremely sensitive to reminders of the inadequacy of their record in Colonial development in the past, as compared with the record and the projects of the present Government. The noble Lord was, of course, perfectly correct in saying that there have been many development loans in the past. But, if the figures be examined, surely it will be found that the scale of such assistance in the past was really puny in comparison with what is being done by the present Government. Again, the noble Lord—I am glad to see that he has come back—was perfectly correct in emphasising that Colonial development, development loans, and so on, are in themselves no new thing; none the less, although my experience of the Colonies is no doubt less extensive than his, when I visit a colony I am often shocked to find how ineffective those efforts, which are alleged to have been made over so long a period, have been in assisting such territories to improve their conditions and in helping to combat the appalling squalor and hunger in which so many millions of the inhabitants have to live.

Earl Winterton: I do not think the hon. Member would hold that view if he had seen as I have seen over the past 17 years such things as Takoradi Harbour, the amazing improvement in conditions in Nigeria and other social improvements in West Africa, for example, the complete eradication of the malaria mosquito from Sierra Leone. Anyone who has seen all these things could not honestly say that there have


been no development in the Colonies between the wars.

Mr. Driberg: I did not say that there had been no development and, of course, I pay tribute to such work as has been done in combating tropical diseases. My point is quantitative rather than qualitative. I insist that the amount, the scale, of such work in the past—and still today, for that matter—has been infinitesimal in relation to the size of the problems and the populations to be dealt with. That is all I say, and from that point of view it is just to claim that the present Government have tackled this problem in an infinitely bigger way than any previous administration has done.
We are sometimes accused, in a word of which the Leader of the Opposition is very fond, of liquidating or wanting to liquidate the British Empire. I should have thought that it might be more just to say that the present Government are sublimating the British Empire—to borrow a word from the psychiatrists whom the noble Lord admires so much. We are beginning to create a decent Commonwealth out of the largely slum Empire that was bequeathed to us by our predecessors.
Having said that, and having been controversial in the first part of my remarks, as was the noble Lord, I should like to say that I found one of his points extremely important and interesting and that was his emphasis on the prior importance of economic development as compared with social and constitutional development, which was also referred to by the hon. Member for Keighley. This is, of course, of fundamental and primary importance, but I would suggest that, rather than give an absolute priority in time to economic development, we should try to encourage the two simultaneously: economic development in itself is not enough unless there is social advancement, which includes, presumably, educational advancement, enabling the people to make full and intelligent use of the economic development that is provided. This is true whether it be in agriculture, for instance in the study of techniques of soil-conservation—a subject of tremendous importance in so many parts of the world—or in any other respect. We should try to get a parallel

development, socially, politically, and constitutionally, as well as economically. I quite agree that it is unfortunate when one too far outstrips the other.
There are two questions I want to ask my hon. Friend before I sit down, if he proposes to speak again by leave of the House. The first is this: in Clause 1 (7) of the Bill, does Subsection (a), which defines the territories covered by the Bill, include such territories as Jamaica, which have achieved what is usually described as partial self-government? It reads:
a colony not possessing responsible government.
If that includes such Colonies as Jamaica, which possess some degree of self-government, I suggest that this wording is not quite correct. It might be altered on the Committee stage if suitable wording can be found, because it is not true to say, whatever view one takes of the character of the present administration there, that Jamaica has not got responsible government. It has got responsible government up to a point, and I suggest, therefore, that on the Committee stage my hon. Friend might consider substituting some such words as:
a territory not possessing full self-government.
My other question is what exactly is covered by the words—
… development of the resources of the colonial territory concerned.
Are those to be interpreted narrowly—possibly it is necessary that they should be—and as referring only to material resources, agriculture, minerals, and so on? Or will they be interpreted rather more widely, to include, for instance, educational development, either general or technical? After all, there is nothing that could contribute more to the development and maintenance of the resources of many of these Colonial territories than, for instance, precisely that study which I have just mentioned, the study of modern methods of soil-conservation.

1.30 p.m.

Sir Arthur Salter: I want to make one passing remark upon the comparison which the hon. Member for Maldon (Mr. Driberg) made between the extent of Colonial development in the past and what is now being undertaken by the Government. He said that past


Colonial development had been infinitesimal in relation to the need. That is a rather strong word anyhow, but the comparison, of course, is not between what has been done in the past and the need, but between what has been done and what is being and will be done now and in the near future. And what will be done will depend not upon the good intentions of the Government, nor even upon the statutory facilities which they have obtained under Acts of Parliament; it will depend upon the resources that can be allotted for that purpose, and those resources are restricted in our present and prospective economic conditions.
It is for that reason I rise not only to welcome and support this Bill, but to express the hope that the Government will do all they can to encourage loans of the kind which are contemplated in this Bill. It is a great advantage that foreign money, and in particular American money, should come in to assist in the development of Colonies, our own and others, and in such a form as it does when it comes as loans from this Bank, a Bank of which while the great bulk of the financial resources are American, is under international control and has an international outlook and policy. This is shown, for instance, by the fact to which reference has been made that as distinct from the Export-Import Bank, the loans so made are not tied to expenditure in any particular country, and the borrowing country can use the resources it so obtains for buying what it needs wherever it finds it most advantageous and economic.
There are several reasons which make it advantageous to develop loans of this character. In the first place it will be a great advantage to the inhabitants of the Colonies because it is clear that, with the addition of external resources of this kind, both the extent and pace of Colonial development can be greater than would otherwise be possible. In the second place, it will also be to some extent a relief upon the hard-pressed economies of the metropolitan countries, our own included, which will find it extremely difficult—if, indeed, it will be possible at all—to export capital from this country on the scale contemplated in the relative Act that this Parliament has passed.
I think, too, that there is a further advantage. In the evolution—constitutional, political and the economic status generally of the Colonies—it is extremely important that what is done should be based upon world opinion, not only in the Colonies and in the metropolitan countries, but in external countries and, in particular, in the greatest of the non-Imperialist powers, America. It is important, however, that this should be informed and responsible opinion, and it seems to me that the association of America with the Colonies in the form now contemplated is a good basis for the development of responsible, informed opinion of that kind.
There is one further advantage. The time must come when Governmental loans of this nature are supplemented by the resumption of private lending and private enterprise. It would be of great advantage if at that time—it may be soon after the period during which the disequilibrium of the world balance of payments is being temporarily bridged by such measures as Marshall Aid—American private investors should find the Colonies an attractive field for the investment of their money. For to the extent to which they lend money in his way there will be a reduction in the necessity for the closing of the gap by the violent reduction of American exports, which might be disadvantageous both to their economy and to the economy of the countries that will still desire to import American goods for which they would otherwise not have sufficient dollars to pay.
I think, therefore, it is advantageous that American private investment should find an attractive field in the Colonies, but there is a great obstacle in the way of that development taking place. The Imperial Powers, our own and others, naturally attach conditions for the entry of investment—for example, for the sake of protecting the inhabitants against the dangers of exploitation, and sometimes for other purposes. It is difficult if successive private investors, or people concerned with the development of private enterprise, have to negotiate one after the other quite separately with the metropolitan Powers as to the conditions under which their money might enter. I think that the Bank—an inter-governmental institution of this kind—can, while


immediately doing something immediately beneficial, also provide the further benefit that it will have cleared the way for the entry of capital under private conditions later.
For all those reasons I not only support this Bill but couple with it an expression of hope that the Government will do their utmost to make these loans really mature.

1.37 p.m.

Mr. Follick: I rise to support this Bill, and I shall not find fault with Colonial development in the past, although in the past it was not co-ordinated—it was too much located in parts of the Empire that could be more easily exploited. We have to aim at a total overall development so that the whole Colonial system can develop at the same rate throughout the world. We have Colonies which have received no attention at all, and even now are not receiving the slightest attention, but which may in the course of time be of the utmost importance in our Imperial development. I have been fortunate enough to visit many of our Colonies. In fact I have been in some Colonies the names of which are hardly known in this House. I have been in Tristan da Cunha, St. Helena, and Colonies of that nature which, seem to ordinary persons of no value, but which may with proper development be not only of great economic but also of great strategic value.
Will the Protectorates be included in this development loan? They are important parts of our Empire. Will the Mandated Territories be included? We cannot develop a Colony alongside a mandated territory without viewing the region as a whole. We have a few small European Colonies like Malta and Gibraltar. How much of the development loan will be given to our smaller possessions? Will they be given any attention other than military? That alone will not be proper Colonial Development.
In the field of education we have one outstanding Colonial development which is not in a Colony at all but in a Protectorate. I am speaking of Makerere College. I was there recently. They are extremely short of books and apparatus for educational purposes. Are we to give sufficient attention to the educational developments of these territories,

in contrast to economic development? After all, economic development depends largely upon educational development. Are we going to give the right sort of education to these people? I went to a secondary school in Uganda. The pupils were being taught about the Punic wars. I asked whether that served a useful purpose and whether the pupils understood about those wars. The answer I received was that those were the only books they possessed. When I was in South Africa I spoke to Dr. Jantsen about native education. He impressed upon me that, "We have got to give the natives an education that will be useful to them and to the Union. We must not give them an education which will be useful neither to themselves nor to the Union."
We must be very careful not to upset the economies of any territories as a result of our loan. Let us consider the -case of Southern Rhodesia, in which Colony we have upset the growth and production of food. The land there could be much more advantageously employed for food and agriculture. Native labour has drifted into the tobacco farms at the expense of food farms, because the pay is higher and the work easier. As a result the price of food has risen tremendously, and, consequently, the cost of labour is much greater than formerly.
How much of this loan is to be applied towards the extinction of diseases? We are all aware of the tsetse fly problem in Lake Victoria district. I went to
their experimental institute for tropical, agricultural diseases and found that there again, money is required. Are we to regard this matter as part of the educational or of the economic development? All these questions have to be studied very carefully.
In answer to my hon. Friend the Member for Leek (Mr. Harold Davies), I found right through Africa, in the Colonies, Protectorates and Mandated Territories, that the officials are of the very highest standing, broad-minded and sympathetic to the natives, in great contrast to the settlers. The present officials in our Colonial Empire are the finest set of people we could possibly send there. I say this because they ought to have some recognition in this House for the great work they are doing and their sympathy towards native questions.

Mr. Harold Davies: What I said had nothing to do with the officials. I was not accusing them of job snobbery, either as a class or in groups. What I am saying is that it does exist generally and even amongst some officials.

Mr. Follick: I found no evidence of it amongst any of the officials. They are very broad-minded and very much taken up with their work. Of the settlers, however, I can only say that up to 15 years ago the English language was not allowed to be spoken by the natives of Kenya. Sir Kenneth Anderson put a stop to that when he was there during the war.
I support the loan. I hope it will develop the Empire and bind the Colonies more than ever to the Mother Country. It will be a sign to the world of the new ideas which are coming to the front in this country, and we shall stand out as a shining example to other nations with Colonies of their own. When the loan is in full operation I hope that some form of co-ordination will be arranged between the Colonies of all the nations throughout Central Africa. They all have the same problems to face and will have to find the solutions together. They cannot find the solutions in an isolated fashion. It is possible that a loan will be required not only for our own Colonies but in conjunction with the French, the Belgians and the Portuguese, to bring the whole of Central Africa up to a very high standard of development, for the ultimate benefit of the whole world.

1.46 p.m.

Mr. Rees-Williams: I shall be glad to reply to the various points raised during the Debate. First, however, I must apologise for the absence of my right hon. Friend the Secretary of State. He intended to be here with me today but, in fact, was delayed by one of those aircraft defects which remind us that in spite of all our notable achievements we have not yet been able to conquer what the hon. Member for South Edinburgh (Sir W. Darling) might call the "empyrean problem."
We have had a very interesting Debate and I think it is most important that we should consider all these Colonial matters with very great care. Every word which is uttered in this House goes out to 40 different territories and is most carefully examined by their peoples, who look to this House to serve their interests and

take careful note of what is proposed. It is most satisfactory, therefore, that so many hon. Members today have joined in the discussion.
The noble Lord the Member for Horsham (Earl Winterton) asked several questions which were most apposite. His first was for an assurance about British machinery, that our manufacturers would not be prejudiced by the
passing of the Bill. I give him that assurance fully. In fact, we are in negotiation continually with manufacturers in this country about different types of equipment for Colonial territories. We enjoy the most amicable relations with the manufacturers, who are doing everything possible to help us in this matter. The second point raised by the noble Lord was his hope that we would not deal with applications on the principle of first come, first served. This is a very important point and one which we are watching. Every application will be considered on its merits and in relation to other possible projects. As the noble Lord will understand, we cannot wait indefinitely for projects to come forward but we shall bear his suggestion very closely in mind.
The colonial territories have been notified of the Bill and are aware of its objects. Its purpose is primarily to develop economic resources. The interpretation of the word "resources", however, which was referred to by my hon. Friend the Member for Maldon (Mr. Driberg), is not in any way intended to be a limited one. By "resources" we mean not merely the obvious resources in the shape of minerals or agricultural products; there are, of course, other resources also. I should certainly have thought that technical education, for instance, might well be one and transfer of population might possibly be another.

Sir W. Darling: Is it possible to borrow from the International Bank for the purposes of education and the transfer of populations?

Mr. Rees-Williams: I do not know; that is a question for the Bank to decide. In the developing of resources, technical education must play a great part. I do not see how we can develop resources without technical education. We are bound to have technicians, fitters, mechanics and so on, and all that forms part of development. One of the features


of our policy is to encourage technical education wherever we can. But, as I say, it is primarily a point for the Bank to decide. We do not intend to define the word "resources" in any limited sense.

Sir A. Salter: In any case I take it that the money coming from this country under existing Acts, and the money which comes from the Bank are complementary. If we cannot get money from the Bank for a particular purpose we consider desirable that can be adjusted in the allocation of money from our own resources.

Mr. Rees-Williams: The right hon. Member for Oxford University (Sir A. Salter) is quite correct. I hope that it was not from his experience of the Treasury, that the noble Lord the Member for Horsham suggested that they may be too rigid in their examination of these schemes. I can assure him that that is not our expectation but that Treasury examination will be in the spirit of the Act, if it is passed. The applications will be considered on general grounds and will not have to go through rigid, detailed and perhaps pettifogging examination, which would defeat the object we have in mind.
In an interjection by the right hon. Member for Oxford University to the noble Lord it was stated that the dollar loans might be used for non-dollar purchases. That is quite correct as far as the statute of the Bank is concerned and under the Bill there is nothing to stop it. Unfortunately, it is the policy of the Bank at the moment that dollar loans shall only be used for dollar purposes, but that may change at any time—I do not see why that should give so much pleasure to the hon. Member for South Edinburgh, who is chortling and chuckling, but it does not give pleasure to us.

Sir W. Darling: Nor here.

Mr. Rees-Williams: We hope it may be remedied in time.

Sir A. Salter: "Dollar areas" does not, of course, mean American countries, but purchasing in any country where dollars are required in order to buy goods.

Mr. Rees-Williams: That is so; within what we call the dollar area. I quite agree with my hon. Friend the Member

for West Wolverhampton (Mr. H. D. Hughes) that steel is the bedrock of our requirements. As I pointed out, the steel allocation in the current quarter is running at about double the allocation in the previous quarter and, from 1st January, there will be even greater improvements. We are doing all we can in regard to steel.
The question of repayment is very important. At present borrowing would have to be in dollars for dollar goods, or in Belgian francs if dollars were not required. The U.S. and Belgium are the only countries which have given permission for a share of their contributions to be used in borrowing.

Earl Winterton: I am sorry to interrupt, but I am standing in a white sheet because I was so instructed as to be in agreement with the right hon. Gentleman and then I was shaken by what the right hon. Member for Oxford University (Sir A. Salter) said. To put it in a nutshell, is it not true to say that this provision enables us to make use, through the Bank, of loans from dollar countries? That is the effect, I believe.

Mr. Rees-Williams: That is the position at the moment, until the Bank alters its rule. The statute of the Bank does not preclude us, but that is the rule of the Bank and the agreement between it and its members contributors. Dollar loans would normally have to be serviced and repaid in dollars.

Mr. H. D. Hughes: Surely there is an escape clause?

Mr. Rees-Williams: There is an escape clause under, I think, Article IV, Section 4 (c) but no honest borrower would put in for a loan thinking he was going to get out under an escape Clause. We certainly would not do that. We assume that dollar loans would have to be serviced and repaid in dollars.

Mr. Hughes: When I say an escape clause, I do not quite mean what my hon. Friend the Under-Secretary of State indicated in his reply. I understand that by agreement with the country supplying the dollars—in this case, the United States of America—it is permissible for the Bank to arrange for the loan to be repaid in sterling.

Mr. Rees-Williams: Yes, I believe it is. The Bank could do so, certainly, but the present condition is that if we want to borrow we would in all probability be met with the rule that we must repay in dollars. I am not saying it is a harsh rule, but it is a fact.

Sir W. Darling: A hard fact.

Mr. Rees-Williams: It is a fact. I do not know whether facts can be hard, or soft——

Sir W. Darling: Oh, yes.

Mr. Rees-Williams: It is a fact. In answer to my hon. Friend the Member for West Wolverhampton, we have no definite projects in mind at the moment. This is in the nature of an enabling Bill, although, of course, in the strictest technical sense, it is not an enabling Bill. It is to give power to Colonial territories to borrow, if they so desire. We shall carefully consider speeches made today, I am sure that the Colonial territories will do so too, and we shall consider the type of project which will come under the terms of this Bill. I am sure the right hon. Member for Oxford University will agree that it is desirable to have various sources to which one could go for various types of project. This is, as it were, another arrow in our quiver, although normally it would be used rather by the Colonial Development Corporation, than the governments of the territories, for reasons I have explained.
I was asked by the hon. Member for Hornsey (Mr. Gammans) for an assurance that there would be no strings attached to this and that assurance I give, apart from the conditions I have mentioned. Certainly there are no strings in regard to re-armament or stockpiling. He also asked for a word of encouragement to private enterprise. Our policy in regard to private enterprise in the Colonies is clearly laid down and does not differ very widely from the conditions he gave this morning. If it goes in in no monopolitistic spirit, under conditions of being a good employer, and if it goes in in accordance with the economic policy of the territory and so on—all of which the hon. Member mentioned—we agree, and there is no real dispute between us. What we do not agree to—and it is not only what we do not agree to but also what is not agreed to by the people in the

territories who are coming more and more to object to monopoly interests——

Mr. Gammans: Like British Overseas Airways——

Mr. Rees-Williams: I was talking of private monopolies—[HON. MEMBERS: "Oh."] There is a very great difference indeed.

Mr. Ivor Thomas: I cannot let this pass, because, on the instructions of His Majesty's Government, I had to go to the United Nations and make a great fight in the debate on the trusteeship agreements, to enable His Majesty's Government to grant monopolies in cases where it was advantageous to the Colonial territories.

Mr. Rees-Williams: It is rather odd that the hon. Member for Keighley (Mr. Ivor Thomas) should come forward and, among his other confessions, confess something he had to do on an official occasion, but what he said does not depart from what I am saying, and does not affect the point. I agree that if private enterprise is acting in accordance with the requirements of the territory and the economic policy of the territory, we welcome it. But we do not welcome these monopolies. Surely hon. Members opposite do not either, and we are not in disagreement. Or do they disagree? Do hon. Members wish to support private monopolies which are acting to the detriment of the people of the territory, and which are strongly objected to by the people of the territory? If not what are they arguing about?

Mr. Gammans: What we are objecting to is that the hon. Gentleman can never make a speech without denigrating and abusing the efforts of private enterprise in the past. We see no sign whatever that he gives them any sign of encouragement for the future.

Mr. Rees-Williams: The hon. Member is difficult to please. I never said a word about private enterprise in my speech. I said that I agree with the hon. Member's definition as to how private enterprise should go into the territories. He now accuses me of never saying a word in recognition or support of private enterprise. In other words, he himself must be attacking or denigrating it, because I am supporting him. He cannot have it both ways.
As to the difficulties of development in the past, we often get, not only in this House but in the Colonies and in the United Nations Trusteeship Council, this sort of argument being bandied about. The fact is that in the past private enterprise could not, and in the present cannot, undertake large scale projects when the possibility of a return is either nonexistent or is related to the remote future I will give the House an example.

Earl Winterton: If the hon. Gentleman intends to deal with this vast subject may I ask him whether he has considered the case of the chartered companies and similar companies, which for years did not pay a dividend, and which today, as a result of the splendid spirit of adventure they showed, are among the most renowned companies in the world? I have never heard such a statement as that of the hon. Gentleman.

Mr. Rees-Williams: I was not referring to chartered companies, but they were not always successful. I am thinking, for example, of North Borneo.

Earl Winterton: I was thinking of South Africa.

Mr. Rees-Williams: The instance of South Africa also proves what I said. It was not profitable. It is difficult for private enterprise to undertake that sort of project. I am not attacking private enterprise; by its nature it was difficult for it to undertake such projects. If I may give an example of what I mean, 40 years ago, when the right hon. Member for Woodford (Mr. Churchill) held the office which I now hold, he went to Uganda and made certain suggestions there which would have altered the whole face of that part of Africa. But in those days there were no facilities to undertake the development which he suggested, and it is only now that such development is taking place.
I am not complaining about the fact that private enterprise did not do these things. It was not intended to do them. I am saying that the State did not do them. My criticism is not so much against private enterprise in the past as against the State in the past because it did not undertake those things which it should have done, and which private enterprise in the past could not undertake.

Earl Winterton: What about Rhodesian copper?

Mr. Rees-Williams: Was that the State?

Earl Winterton: No, private enterprise.

Mr. Rees-Williams: That is what I am saying. In the case of copper, manganese, lead and tin there is the possibility of a fairly immediate return. In the case of other schemes of a far-reaching nature, particularly in African developments, in connection with which there is no possibility of a return within any appreciable period, and perhaps not a direct return at all, the State should have come to the assistance of that country's development.
The Colonies themselves could not afford this development, and the only ways in which they could have developed them in those days were the two I have mentioned, which have so often been adopted by metropolitan countries rather than by Colonial Powers. That is, either by exploiting the peasants or by obtaining large foreign loans with "strings" to them. I should have though that everything which I have said today was so much common form and so well known that it could not be questioned. I am not attacking private enterprise. I am explaining why private enterprise did not do these things.

Sir W. Darling: May I put to the hon. Gentleman as an example the British India Company, which was taken over by the State. Does the hon. Gentleman think that that was a successful pattern?

Mr. Rees-Williams: In its early days the East India Company was purely a trading chartered company, with its little stations at Fort William, Fort George, Calcutta and Madras. That is how things had to be done in those days, and such an instrument had to be used. But we have gone ahead since then. The hon. Member is still in the 17th century while we are living 300 years later. We are trying to remedy the mistakes of the past and to provide agencies other than those which were then available.
I must correct one reference which has nothing to do with the Colonies. It was made by the hon. Member for Hornsey (Mr. Gammans)—he has made it twice this morning on two different Bills, which must be a record—to our "lending" Burma £2 million. Burma is a member


of the sterling area and has drawn the £2 million as a member of the sterling area. His Majesty's Government and the Governments of the territories concerned are responsible for law and order, and they fully intend to see that their responsibilities are carried out, even under the most difficult circumstances. We hope that we shall have the support of the hon. Member in discharging that duty.
My hon. Friend the Member for Leek (Mr. Harold Davies) asked about the trading agreement with Japan. We hope that it will be helpful to the Colonies. It will provide them with Japanese prints and cotton goods. They will supply in return some of the raw products which the Colonies produce. We hope that the agreement will be helpful, and we think it will be. With regard to these Japanese prints, I recently made a tour of West Africa and I took particular note in the markets as to the prints there. There were many Japanese cotton goods which had been reprinted in Lancashire. I gathered from the market women and the women who were buying that they still like Lancashire goods, and when Lancashire cotton goods come back on the market in ever increasing numbers, as we hope they will, they will find ready customers. The people in the Colonies have a great admiration for British goods. The British bicycle in particular stands on a plane which is all its own. It is essential that the British manufacturers should maintain standards. They have a great name in the Colonies because in the past their goods have always stood the test of time and the test of hard wear. It is essential that they should maintain those standards.
My hon. Friend the Member for Leek finally asked about "job snobbery." I think that he was misunderstood by hon. Members opposite on this point, and that what he meant was that there is in the Colonies a field for people who perhaps have not university or even professional qualifications. We have recognised that and created opportunities for a type of person called a development officer, who is proving himself most useful. He is invariably an ex-Serviceman, who has not got qualifications or a degree. He goes as assistant to the engineer or the agricultural officer or the district officer, and takes from those well trained and valuable people an immense amount of routine work, such as checking up, investigation,

etc., which is most valuable. So to some extent we have met the point of my hon. Friend.
The hon. Member for South Edinburgh (Sir W. Darling) had obviously not read the Bill. I make no complaint about that. We are often interested by speeches made by the hon. Member which show a very limited acquaintance with the Bill that is before the House. But he and I always listen when we can to each other's speeches, and I was hurt that he had not listened to my speech on this occasion. Had he done so many of his difficulties would have been dissipated. There is no question of the amount of interest on the loan being mentioned in the Bill which he suggested. Nor does the question of a difference between the reason for the Trinidad loan and the loan from the Bank arise in this Bill, but I did explain it in my speech. The Trinidad loan is a sterling loan. I saw some expression of pain on the face of the right hon. Member for Oxford University (Sir A. Salter) when the hon. Member for South Edinburgh made his statement. It is obvious that the right hon. Member for Oxford University had read and understood the Bill.

Sir W. Darling: On what theory does the Under-Secretary come to the conclution that I have not read the Bill? It is a very simple Bill and even my limited intelligence can appreciate it.

Mr. Rees-Williams: I had such respect for the intelligence of the hon. Member that I thought that if he had read a short and simple Bill he would understand it. He had not understood it and I naturally assumed—perhaps wrongly—that he had not read the Bill.

Sir W. Darling: It is a simple and not very satisfactory explanation. I was following the hon. Gentleman when he made his remarks. I did not need to read the Bill. I had only to follow the simple statement of the hon. Gentleman.

Mr. Rees-Williams: In that case my respect for the hon. Member's intelligence must go down.

Sir W. Darling: Such humiliations are common.

Mr. Rees-Williams: The hon. Member for Maldon (Mr. Driberg) drew attention to the necessity for economy and social


progress to go hand in hand. He asked me two questions, one of which I have answered, about resources. The other one was whether Jamaica was within the scope of the Bill. It is included under Clause 1 (7, a), but I will look into the point he has raised before the Committee stage. I am obliged to hon. Members for the very great consideration they have given to this Bill.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Monday next.—[Mr. Joseph Henderson.]

Orders of the Day — COLONIAL LOANS [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).—(King's Recommendation signified.)

[Mr. BOWLES in the Chair]

Resolved:
That, for the purposes of any Act of the present Session to authorise the Treasury to guarantee certain loans by the International Bank for Reconstruction and Development to the Governments of colonial territories, it is expedient to authorise—

(a) the guarantee by the Treasury of the principal of and the interest on any such loan, so, however, that the amount of the principal of the loans so guaranteed shall not in the aggregate exceed the equivalent of fifty million pounds;
(b) the charge on and issue out of the Consolidated Fund of any sums required by the Treasury for fulfilling any such guarantee;
(c) the payment into the Exchequer of any sums received by way of the repayment of any sums so issued."—[Mr. Rees Williams.]

Resolution to be reported upon Monday next.

Orders of the Day — SPECIAL ROADS [MONEY]

Considered in Committee.—[Progress, 11th November.]

[Mr. BOWLES in the Chair]

Question again proposed,
That, for the purposes of any Act of the present Session to provide for the construction of roads reserved for special classes of traffic, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of such sums as may be required to be paid into the Road Fund for the purpose of defraying out of that Fund—


(i) expenses incurred by the Minister of Transport with the approval of the Treasury under the said Act of the present Session in the construction, maintenance, repair or improvement of roads;
(ii) sums required by that Minister for making advances under section eight of the Development and Road Improvement Funds Act, 1909, in respect of roads provided or to be provided in accordance with schemes under the said Act of the present Session (including advances in respect of expenses which, under the said Act of the present Session, are deemed for the purposes of the said Act of 1909 to be incurred in the construction of such roads);
(iii) such other expenses of that Minister under the said Act of the present Session (not being administrative expenses) as may be determined by that Minister with the consent of the Treasury;
(b) the payment out of moneys provided by Parliament of any expenses of the said Minister under the said Act of the present Session, other than those required to be defrayed out of the Road Fund, to such amount as may be approved by the Treasury, and of any increase in the Exchequer Equalisation Grant payable under Part 1 or Part II of the Local Government Act, 1948, attributable to any expenditure of a local authority under the said Act of the present Session;
(c) the payment into the Exchequer in accordance with section one hundred and seventeen of the Road Traffic Act, 1930, of all fines imposed in respect of offences under the said Act of the present Session."

2.15 p.m.

Mr. Peter Thorneycroft: I wish to make a few observations on this Resolution. I would remind the Committee that we are not concerned with the arguments adduced on Second Reading. We are not arguing the appropriateness or otherwise of having motorways, segregating traffic, road safety, and all those other matters which will be dealt with in the Committee stage. What I am concerned to discuss is the financial aspect of this matter as disclosed in the terms of the Money Resolution. If one examines those terms one finds the Money Resolution is concerned with three things. First of all, the raising of a sum of money, secondly, the payment of that sum of money into a fund called the Road Fund and finally, the payment out of that Road Fund for the purposes of the Bill.
The Committee will remember that at one time the Road Fund was a self-accounting fund; that is to say, money was raised by licences and other forms
of taxation in the Fund and payments were made out for the purpose of repairing


roads. That happy state of affairs was, I regret to say, brought to an untimely conclusion by the intervention of my right hon. Friend the Member for Woodford (Mr. Churchill). No longer does the Road Fund act as a self-accounting fund. But it still exists, and money is still paid out of it, not only for the purposes disclosed in the Special Roads Bill, but for the whole of the road maintenance arrangements. It produces an annual report, and so forth.
I think the Committee is entitled to an explanation before it passes a Resolution which gives such very wide powers to the Minister for raising money for such a very unspecified purpose. The Financial Memorandum in paragraph 15 states:
It is not possible to frame an estimate of the total costs that will be involved if the powers sought in the Bill are granted. It is unlikely, however, that these powers will result in any such substantial increase in the total annual expenditure which would otherwise have been incurred by the Minister in respect of roads. The most important and most costly type of special roads to be provided under the Bill would be motorways, and in general these will be built where, but for the powers of this Bill, it would have been necessary under existing powers to provide an all-purpose road.
That is a rather vague statement as to the kind of expenditure which the Minister of Transport envisages as likely. The only example the Minister vouchsafed us was that it cost half a million more to build a motorway than to repair the existing highway. I would ask the Parliamentary Secretary to give us a slightly better explanation before we vouchsafe him a Financial Resolution in terms as wide as this one. After all, the estimates as to the total cost vary very considerably. According to the Ministry it is a figure of £150 million.

The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): No.

Mr. Thorneycroft: Well, £150,000 per mile for a thousand miles of road is £150 million, if my arithmetic is right. But the British Roads Federation, whose work in this matter obtained a well-deserved tribute from all sides of the House, estimate as much as £550 million. There is rather a gap between those figures and I hope the Parliamentary Secretary will give some indication of

which is right. I suggest that the right approach when we are concerned with a Money Resolution such as this is the approach one would make in the case of an industry seeking to capitalise itself.
The main point to which I want to direct the attention of the Parliamentary Secretary concerns the extraordinary method which has been adopted here. It is the more extraordinary when one considers the general policy of the Ministry of Transport upon road and rail questions. This Financial Resolution proposes the voting of money for capital development upon the roads. Personally, I welcome that. I am for every form of transport making its maximum contribution to efficient transportation inside this country. But that is not the policy of the Ministry. Their policy is to take road and rail together, to look at them as one. As I understand their policy, it is to plan the capital expenditure on both these industries so as to fit them into an integrated form of inland transport. So far, the Minister has given no answer whatever about how he reconciles this Financial Resolution for a special expenditure upon the roads with his transport policy in general. The House is entitled to an answer before it gives important powers such as those asked for now.
The methods which the Ministry have so far proposed—I am not concerned to debate their merits; I think that would be out of Order—to pursue their policy is to raise, say, the bus fares in order that people would be discouraged from travelling on the road and encouraged to travel on the rail. Suppose this Financial Resolution is passed, suppose these powers of raising money are given, and the money is passed from the Exchequer into the Road Fund. The matter will not stop there. The money will, therefore, be spent on capitalising and increasing the efficiency of road transport both of goods traffic and of passenger traffic. Obviously that will put the Government into very considerable difficulty. There will be a tendency for people to use this road transport rather than the rail transport. When the Parliamentary Secretary was pressed upon this matter his answer was quite simple. His solution was, "We will not have any buses at all on the roads, generally speaking.'
It will be a very expensive Friday afternoon if we vote powers to expend £150 million for a thousand miles of empty concrete with nothing running on them at all, everything being prohibited and restricted by the Minister in order that his own rail transport system may be a paying proposition. This is the most astonishing departure from anything that the Ministry of Transport have ever done. If has often been said that the Conservatives criticise planning, but if ever there was an example of lack of planning it is this one on the part of the Government. I do not believe that the Department of the Ministry of Transport which has produced this Bill has ever been in touch with the Department of the Ministry of Transport—if it exists—which is charged with the duty of providing an agreed rate structure and integrating road and rail transport. Does the Parliamentary Secretary really intend to take these powers of raising money only for him and his Department to prohibit either bus passengers or goods traffic travelling on the very roads we hope to see created? If he does not want that, how on earth, in the face of a Bill like this, does he hope to obtain the integration of transport in one form and another? I think we are entitled to an explanation.

2.26 p.m.

Sir Arthur Salter: I rise to express agreement with my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) as to the unwisdom of introducing this Resolution in this form at this time. In doing this I say at once that I do not contest the view of the Government that, when the time comes for a substantial reconstruction of our road system, special roads or motorways should form an important feature of that reconstruction. There are, however, two very great disadvantages in introducing this proposal at this moment. The first is that obviously it cannot have any practical purpose of any importance in any near future. The second is that it asks for wide and general powers to execute a plan and a policy which, as far as we can learn, not only has not been indicated to us but does not exist. I should like to make a few comments on each of those two points.
The Minister referred to a plan for the building of roads amounting only to about a 1 per cent. addition to our exist-

ing trunk and classified roads to cost £150 million. As my hon. Friend has said, beyond that there is a suggestion—and it is not surprising seeing that what the Minister had mentioned was only a 1 per cent. addition—of the expenditure of a sum of something like £550 million. It is perfectly obvious that nothing of that kind can be undertaken——

The Deputy-Chairman: That is definitely a matter which was raised, and which should only be raised, on the Second Reading. The right hon. Gentleman must confine himself to the terms of the Financial Resolution.

Sir A. Salter: I accept your Ruling, Mr. Bowles. I was only saying that I think the introduction of this Resolution at this moment in the circumstances to which I have alluded has the great disadvantage of deceiving the public as to the vital importance of concentrating in the years immediately ahead upon the task of getting ourselves into a self-supporting position before 1952.

The Deputy-Chairman: The right hon. Gentleman is disobeying the Chair's Ruling. Surely he understands that he must keep to the Ruling I have just given as to the terms of the Financial Resolution.

Sir A. Salter: Am I not entitled to argue as to the wisdom of introducing the Resolution at this time in these circumstances?

The Deputy-Chairman: No, I think not. The position is that the right hon. Gentleman possibly had his opportunity, if he were in the House on the Second Reading of the Bill to say that its introduction was ill-timed. I think I heard that said quite often by Members of the Opposition. That having been the position, and the Bill having been read a Second time, then automatically this Resolution follows and the timing of its introduction cannot be discussed by the right hon. Gentleman.

Sir A. Salter: I will drop that point. I should like your guidance whether I am now entitled to express regret that a Resolution of this kind which asks for wide powers should be introduced without the simultaneous presentation of a plan and an indication how this money will be utilised?

The Deputy-Chairman: I am trying to be completely consistent in this matter. The House has already decided to give this Bill a Second Reading without a plan. That matter, if I remember accurately, was raised during that Debate. Therefore, the right hon. Gentleman is not in order in complaining about the introduction of the Financial Resolution now.

Sir A. Salter: In that case, I propose to conclude my remarks. I think my hon. Friend was allowed to express regret that there is nothing like a plan for the in tegration of transport. As I am not allowed to argue that——

The Deputy-Chairman: I listened very carefully to the speech of the hon. Member for Monmouth (Mr. P. Thorneycroft). I do not think that he said that kind of thing at all. I listened very carefully because I have to be careful to see that hon. Gentlemen remain in Order on the Financial Resolution. I think that I was quite consistent in ruling the right hon. Gentleman out of Order and not ruling the hon. Gentleman out of Order.

Sir Patrick Hannon: Further to that point of Order, is it the custom in this Committee, when a Financial Resolution is submitted, that no discussion can take place on the purpose to which the expenditure provided for in the Resolution is subsequently applied when the Bill becomes operative? Surely, there ought to be some opportunity by which the Committee can discuss the Financial Resolution and the purpose for which the money voted in it is to be applied?

The Deputy-Chairman: The position is that that particular point might possibly be dealt with during the Committee stage of the Bill, but that it cannot be done in Committee on the Money Resolution.

Sir A. Salter: May I argue that the Resolution is drafted so widely that it does not indicate with any precision the kind of purpose for which the money contemplated in the Resolution will be used?

The Deputy-Chairman: I think the right hon. Gentleman will be able to do that, and also to argue in favour of the restriction of the terms of the Resolution. I think that would be in Order, and, if an amount is mentioned, an argument for the reduction of that amount.

Sir A. Salter: I should like, then, to express regret that the Resolution has been drawn in terms so wide that it would not only permit expenditure of money of the order of magnitude which has been mentioned by the Minister, namely, about £150 million——

Mr. Callaghan: Mr. Callaghan indicated dissent.

Sir A. Salter: I beg the hon. Gentleman's pardon, but what he did say, when the Bill was introduced, was that it was to give effect to a plan for the construction of 1,000 miles of road of this special type, which he estimated would cost £150,000 per mile, which is precisely equivalent to what I have said—that he is proposing an expenditure, or is seeking powers for the expenditure, of £150 million. Perhaps the hon. Gentleman will explain why I am wrong? Is my arithmetic wrong or is my recollection of what the Minister said wrong?
My present argument is that, whatever was the intention of the Minister, the Resolution has been drawn in such wide terms that it would allow an expenditure immensely in excess of any plan which the Minister described to us on Second Reading. I think that is an extremely important thing, because a great deal of the money might now be spent outside the limits of the scheme which the Minister put before us. My protest against this kind of Resolution is that, in fact, we are giving enabling powers to the Government without having them tied or married to a policy or plan at the same time.
In view of your general Ruling, Mr. Bowles, I do not propose to develop this argument in the detail which I had otherwise intended, but I think it is extremely undesirable that we should be giving powers which can be used to promote something of which we have had no indication, even in outline and still less in detail. I say even in outline because my complaint against the drafting of the Resolution is that it does not state that the expenditure of money is limited to the kind of general policy which the Minister described.
It is quite obvious that it is of the very essence of the Government's problem in regard to transport, that they should have a real plan for integrating road and rail transport But this Resolution would enable money to be spent in


a way that is not only not based upon such a plan but is utterly destructive of any such plan. In those circumstances, I think that the Government, in asking for an enabling Resolution unrelated to any plan, are really asking, and not for the first time, that Parliament should abdicate its proper legislative function.

2.36 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): It is quite clear that I shall have to step warily in order to keep within the terms of the Financial Resolution, and I shall endeavour to do so. I ought to start by saying that this Financial Resolution follows on an enabling Bill, a Bill to empower us to do something, to enable us to bring what we propose to do before the various authorities who will carry it out, so that, in due time, the expenditure which will have to be authorised will be properly sanctioned. The Resolution enables us to do that very thing.
In case anyone may have been misled by what the right hon. Gentleman the senior Burgess for Oxford University (Sir A. Salter) said, there is nothing exceptional about the terms of this Financial Resolution, and I am advised that it is in precisely the same terms as that in connection with the Trunk Roads Act, 1946, which was passed by this House, and which, to the best of my recollection, aroused no passionate cries of dissent. I am bound to say that I think the terms in which it has been framed enable the Committee to discharge its responsibility in due course when it is asked to vote this money.
What will happen, of course, as I need hardly explain, will be that, as expenditure on these roads becomes possible, the annual Estimates of the Ministry of Transport will contain proposals for spending money of a nature and of an amount as will be consistent with the proposed programme. The Committee will then, in due course, fulfil its duty by raising on the Ministry of Transport Estimates, in connection with these particular proposals which the Minister lays before the Committee, any such questions as it might wish to ask in relation to the expenditure or the manner in which it is going to be undertaken.
What this Financial Resolution does is to enable us to make these plans and lay them before the House in due course, and it enables us to come before the House with our proposals on which we are to incur this expenditure. That is the whole purpose, and, to that extent, I cannot see that the Committee is being asked to commit itself to something that would be unjustifiable. Indeed, I venture to say that it is within my recollection that the Public Accounts Committee has expressed adverse comments on Departments which bring forward, year by year, proposals for expenditure of the same type without having secured legislative sanction in advance for those amounts. I am not an expert on constitutional matters, but I am almost prepared to say that that is true. All that this Resolution seeks to do is to give us power to come to the House annually and say that we propose to spend so much money in the coming year on such and such a plan for such and such roads.
That is the reason why the Financial Resolution has been widely drawn, and also why we have not put a figure into the Resolution itself. No one can say, in fact, how much money is to be expended. That will be for the House to decide year by year, and, if the House thinks that the expenditure is getting too big, it will be for the House to say so. Every year, that will provide an opportunity for keeping a check on the Government of the day on the amount that is proposed to be spent in this direction. I have scrutinised the remarks made by the hon. Member for Monmouth (Mr. P. Thorneycroft) on the last occasion in order to see if it is possible to put in an estimate, and I am satisfied that, even if there were a set programme of development over a fixed period of years which we were able to state now, it would not really serve the Committee very well at this stage to insert a figure in the Resolution.

Colonel Dower: As a member of the Public Accounts Committee, I think I am right in saying that we should like an assurance that, when the Minister does ask for money from time to time, the real plan, not necessarily in detail, but the general principles involved in asking for the money, will be put before the House.

Mr. Callaghan: I think the hon. Gentleman will find that in one of the Clauses of the Bill—which one it is escapes me now. There is a very detailed public procedure to be followed before such a proposal can come into effect. I think that will give hon. Members the cover they want, so that they can take care that the money that is asked for is properly spent. There will be public inquiries to make certain that what it is proposed to do and what is being done is in the public interest.
The reason why on technical grounds—on the grounds of what it is going to cost in relation to a programme—it is impossible to put in any figure is simply that no one can say what price levels and cost levels are likely to be over the next few years. We can make now a comparison between the costs of building a trunk road in 1948 and the cost of building a similar road in 1938, and it is upon that basis that the figure of £150,000 has been constructed. I doubt very much, however, whether that will help us to arrive at a reliable estimate of the total cost that may be involved on all 1,000 miles to which reference has been made. That is why I shook my head when the right hon. Gentleman mentioned the figure of £150 million, which my right hon. Friend did not mention.
The hon. Member for Monmouth asked for a conciliation between his multiplication of 1,000 miles by £150,000 and the figure which has been quoted by the British Roads Federation. I understand that that last figure includes a number of others, quite apart from the cost of the 1,000 miles of motor roads; it includes a great many other things. I imagine that is the difference, but I am quite sure that, if there is a wide disparity between their estimate and ours, that is all the more reason for my feeling that it would be wrong to put a figure into the Money Resolution—if at this stage experts cannot agree what the total cost is likely to be, and provided that hon. Members can be safeguarded, as I am saying they are safeguarded, by the fact that the Minister will be required to come to them year by year to ask for these sums as he wants them. It is, of course, possible to estimate—and my right hon. Friend did quote—the cost for particular sections of the road, but to be provided a national figure one would have had to undertake

the whole of the surveys for the whole of the area before coming to the Committee. That would not have been possible.
I think I get on to rather more difficult ground in trying to keep within the rules of Order and at the same time making some comments on the question of the conciliation between the railway policy and the roads policy of the British Transport Commission. However, I will endeavour to keep within your Ruling, Mr. Bowles, and at the same time to make some comments. The reason why we ask for permission to spend some money in due course for the development of roads although at the same time the railways are seeking additional traffic, is that we believe that road and rail traffic are complementary. We believe that it would be improper to develop railways by strangling the growth and proper development of road traffic.

Mr. P. Thorneycroft: I welcome this statement by the hon. Gentleman, but does he, in this circumstance, withdraw his previous statement, that, generally speaking, he proposes to prohibit buses from going along these roads to secure that end?

Mr. Callaghan: I understand that I should not be in Order in referring to a previous Debate, but if I may say a word on the question of buses I would say that, quite obviously, buses will not use these roads.

Mr. Thorneycroft: Why not?

Mr. Callaghan: These are to be roads to run from one large centre to another large centre, and local bus traffic, with fares of one penny or twopence, will not run along those roads.

Mr. Thorneycroft: There may be some misunderstanding as to terms. Obviously, these great roads, these motorways which are proposed will carry motor coach traffic, will constitute direct competition with the main line railways. Are those motor coaches to be allowed to use those roads or not?

Mr. Callaghan: The hon. Gentleman is putting up a case he did not make last time, and with which I did not deal last time. He was talking of buses, and now he is talking of motor coaches on long distance journeys. Clearly there is no intention to prohibit them from using


those roads. If there was a misunderstanding on that matter, we can clear it up straight away. Buses, I suppose, make the runabout journeys in the towns, and coaches are and always have been the rather luxurious vehicles running on long distance journeys. That sort of traffic will fall into one of these schedules and will run along these roads. As the Minister sees the position at the present time, goods vehicles, coach traffic, private motor cars and the rest will use these roads. The whole case for this Bill, as I said before, is that the roads have only outgrown their——

The Deputy-Chairman: I think that the hon. Gentleman must not repeat the argument he used on Second Reading. He is going a little too wide now, I think.

Mr. Callaghan: That was what I feared. I wanted to deal with this case, and I am sorry we have not had a chance to deal with it. I will keep within the rules of Order. The point I seek to make on that particular issue is simply that we need this money to make certain that the present motor industry in all its phases shall not be unduly hampered by the size of the roads and their inadequate nature.

Mr. Thorneycroft: I am not going to invite the Parliamentary Secretary to go outside your Ruling, Mr. Bowles, but I do invite him to answer the much narrower question I asked. The particular method proposed in this Money Resolution for capitalising transport seems a very odd one, an out-of-date one, according to his own policy. He is going to pour money into the Road Fund exclusively for road development without any reference, apparently, to the British Transport Commission. It is all very well to ask hon. Members to suggest how these things are to be done from time to time, but they cannot. The original suggestions have to come from the Transport Commission under the set-up the hon. Gentleman has got, and he has made no proposals to us of how that is going to be done.

Mr. Callaghan: I was not aware that I had asked the hon. Gentleman to make suggestions of that nature. I am aware that I did nothing of the sort. The hon. Gentleman seems to be forgetting that the British Transport Commission is to be a large-scale owner itself. It will

be the largest single operator of long distance goods traffic in the country in the years that lie ahead. In its particular interests it should have economic means of transport for its large fleet of vehicles running along the roads of this country. We should have had to spend a very large amount of money in any case on getting the roads of this country in order. This Money Resolution will enable us to spend that money in a much more efficient way than we could have spent it otherwise. That is why we ask the Committee for the Resolution today.

Question put, and agreed to.

Report to be reported upon on Monday next.

Orders of the Day — HOTEL AND CATERING INDUSTRY

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. R. Adams.]

2.50 p.m.

Mr. C. S. Taylor: It is customary, I believe, for any hon. Member speaking in this House to disclose his interest in the industry under discussion. My particular interest in the hotel and catering industry is, first and foremost, that it happens to be the largest industry in my constituency. Secondly, I have the honour to be vice-chairman of the Council of the British Hotels and Restaurants Association, and I hasten to say that I get no remuneration from that source, my services being purely honorary and voluntary.
I understand that the Government have a four-year plan for the rehabilitation of the country and that this plan is to be incorporated in the plan of the Organisation for European Economic Co-operation. According to the "Observer" last Sunday, there is one sentence in the plan of the British Government which says:
The Government believes that the tourist trade is of the greatest importance. Plans are being made to modernise hotels and increase their capacity.
If one did not know very much about the British hotel industry one would think, from reading that statement of the Government, that they were prepared to do all they reasonably could to make the industry successful. We know from past


experience that this is sheer utter nonsense, and in a few minutes I shall try to show what the Government have done, what they have not done, and what they should do to help this important industry.
I begin with food. Over a long period the hotel and catering industry have tried to get an increase in the 5s. maximum limit for meals served in hotels and catering establishments. The 5s. meal limit was agreed in 1942. In 1947 the industry submitted a case to show that for various reasons a 5s. meal in many cases could not be served with any profit at all to the hotelier or caterer. To begin with, since 1942 it is estimated that the cost of food has gone up something like 1s. a meal. Secondly, there has been a considerable increase in wages between 1942 and 1947 amounting, I believe, to about 1s. 6d. a meal, and in addition there have been increased charges for laundry services as well as an increase in maintenance and equipment charges.
We therefore see that even in 1947 it was pretty difficult for any small or medium-sized hotel with medium-sized overhead charges and without any house charge to serve eatable meals at anything like 5s. without making a loss. Since 1947 there has been a further increase in wages. In March of this year there was introduced the Wages Regulation Order, and under that Order it has been estimated that a further 6½d. should be attributed to the cost of a meal because of the increased wages which are paid to the staffs. I believe that we could quite easily remove that 5s. limit altogether. I do not believe that the 5s. limit is any longer serving a useful purpose, because we now see the ordinary laws of supply and demand coming into action.
Any hotel or restaurant which charges too much or which charges a price which is beyond the purse of the person to whom the meal is to be served, or which does not give good service and good value, will no longer secure business. If the 5s. maximum limit could be removed, the smaller establishments with fewer overhead charges and with less expenses would perhaps be encouraged to reduce the maximum price and charge even less than 5s. I believe we should see a resumption of fair competition in this respect.
Then I come to the specific point of the Christmas and New Year holidays. It is an old English custom to indulge in some special celebrations over the Christmas period. We also like some little celebration to see the New Year in, especially in Scotland, and hotels and restaurants naturally want to do their bit. They want to be able to do something a little out of the ordinary to give the festive season a bit of a fillip. It is quite apparent that if these hotels and restaurants are already losing money on the 5s. meal, they will not be able to do anything special for Christmas Day, Boxing Day or New Year's Eve.
In the first place, I ask the Minister of Food to reconsider the whole question of the 5s. meal limit. Secondly, hotels and restaurants must be given some authority to increase their charges over the Christmas and other holiday periods. That authority is required immediately if hotels and restaurants are not going to close over the Christmas period because already during the Christmas and bank holiday periods they have to pay something like treble wages to their staffs under the new Wages Regulations.
One of the difficulties which we in this House have to face when we discuss the hotel industry, is that there are so many Ministers concerned. I have finished my point which concerns the Minister of Food. I next turn to the question of equipment. It is agreed that the hotel industry is one of the leading dollar earners in the country, and if the industry is to give satisfactory service, undoubtedly much more equipment must be made available to it. I know that Sir Alexander Maxwell, the chairman of the British Tourist and Holiday Board, has done what he can. He has made representations to the Government, but unfortunately his representations do not always meet with success, and although I would give Sir Alexander the greatest credit for all that he has tried to do, I give His Majesty's Government the very opposite for what little they have done.
Sheets and towels are probably still the most outstanding need, although there are many other outstanding needs. It is no good giving an American visitor a bath towel about the size of a handkerchief. It is no good saying to an American visitor "We can only afford to supply you with one sheet on your bed." If


necessary I can give specific instances of visitors being given only one sheet on their beds instead of two. We are told that sheets and towels are needed for the export trade. Of course, they are. So is crockery. But what is the good of giving our overseas competitors sheets, towels, linen and crockery when they are competing with the dollar earning capacity of our hotels in this country? How can British hotels be expected to compete with the foreigners when they are left with few sheets, few towels and only cracked crockery?
Even on the question of building permits, the hotel industry is not being treated fairly. Why should the hotels and restaurants be treated differently from shops and offices? They are of just as much value to the well being of the country, and I repeat they are one of our biggest dollar earners—and I want to ram that point home. Surely, therefore, the new free limit of £1,000 for building repairs should be applicable to this industry. Let the industry be given a chance to modernise itself. The statement on the Four-Year plan says:
To modernise hotels and increase their capacity.
I suggest that not only have the hotels been prevented from modernising themselves and increasing their capacity, but they have not even been able to renew a great deal of their machinery and equipment which is now out-of-date because of the war years. I also understand that hotels and restaurants are classified as commercial consumers for the purpose of electricity cuts. If they are so classified, why should they be classified differently with regard to building licences?
On the subject of electricity, the British Hotels and Restaurants Association recently made strong representations to the Ministry that they should be one of the bodies to be represented on the consultative councils now being set up under the Electricity Act. In reply to a question of mine in this House, the Minister of Fuel and Power said that among other bodies, the Parliamentary Committee of the Co-operative Congress, the standing Joint Committee of the Working Women's Organisations, the Women's Voluntary Services and the Electrical Association of Women have been invited to submit nominations for the consultative councils.

They may all be admirable bodies. I do not know what the Electrical Association of Women is, but it may be that it is an association to give shocks to men. Why is it that one of the biggest users of electricity throughout the country has not been invited to send a representative?
I now turn to petrol. With regard to the small basic allowance which was all that was available to holiday-makers last year, and which reacted so severely on hotels in the more remote holiday districts, the industry feels that it is wrong to prevent someone from going to one of the outlying holiday destricts because he cannot obtain sufficient petrol to get there and back. I believe that some of my Scottish friends, who will be speaking later in the Debate, will have very much more to say about that subject. A suggestion which I submitted to the Minister was that British citizens who did not take up their £35 allowance for travelling abroad should be given additional petrol for use in this country. That seemed to me to be a very fair thing to do—when one goes abroad one spends foreign currency; if one stays in this country one spends the equivalent amount of foreign currency on an additional petrol allowance. The Minister told me that the scheme was impractical but I do not believe that he had looked into it as much as he should have done, or that it is beyond the wit of man to evolve such a scheme.
I now turn to what is perhaps the most important part of my story—that is the Wages Regulation Order to which I have already referred, and which came into being in March of this year. This order is not working satisfactorily; in fact, that is putting it mildly. It is creating chaos and havoc in the industry, and I do not believe that, generally speaking, it is acceptable to the management or to the staff. It has dealt the hotel industry one of its most severe blows, if not the severest blow it has ever received. Everyone wishes to see the workers in the hotel industry protected from exploitation, but the only effect of this order has been to make it necessary for hotels to close, thereby creating unemployment.
I should like to give examples of some of the anomalies arising out of this order, and also some of its effects. In the first place, in a few instances the extra cost of operating the order has been passed on to the guests without any


reduction of service—but I would remind the House that this cannot be done in the case of meals. In other cases efforts have been made to maintain the services by managers relieving the staff and working very long hours themselves. Many establishments have been very reluctant to lose the good will of their visitors, with the result that many places have decided to keep open for this year, at any rate, at a loss. In the majority of cases the services have been very drastically curtailed in one or more of the following ways.
The establishments in some cases have closed down altogether during the winter, and in other cases it is intended to close down during the Christmas and Easter holidays, or to give only a token service at these times. The period during which meals can be served is to be reduced. Afternoon teas are no longer to be served, and no light refreshments are to be given after a certain time in the evening. Early departures and late arrivals cannot possibly be served. Bedroom services are also to be drastically reduced, and the holding of functions, such as dinners and so forth, will be either suspended altogether or greatly reduced.
The position of the small seasonal hotel is particularly difficult. The employment of additional staff is probably not practicable, which means that the existing staff have to work longer hours on overtime and "spread over" duties. The cost of the overtime has to be passed on to the guests, or the service has to be very much reduced. Many of these small hotels cater for people with small means, and therefore the cost of holidays for the middle-classes and the workers will be greatly increased.
I now wish to turn to some of the anomalies. The first example I wish to give, which is a true case, is that of a waiter normally working eight hours a day, who starts at 7 a.m. and finishes at 9 p.m.—during that period he actually works only for about seven or eight hours. If a guest arrives a quarter of an hour late because his train is late or his car has broken down, it will cost the employer 17s. 2¾d. extra to retain the services of the waiter. I also know of a case of a restaurant which served a late meal sitting on a Bank Holiday, with the

result that the manager had to pay £25 in additional wages which meant that he made a substantial loss.
In addition, there are complex calculations to be made. The rate of pay for a stillroom maid works out at something like 1s. 6d. and one-eighth of a penny per hour. If she works overtime the first two hours work out at 1s. 10d. and 21/22nds of a penny. The next three hours work out at 2s. 3d. and 3/16ths of a penny, and any other at 3s. 0¼d. If it is spread over more than 12 hours, although she actually works only eight hours, there is an extra amount of 1.13/16ths of a penny for each hour worked, and if the duty is spread over 14 hours the pay is doubled. The effect on the hotels has been disastrous, and I have here one or two comments from hotels as to how the position affects them. One considerable tourist centre receiving visitors from overseas says:
We cannot pretend to give service nowadays—as the overtime to staff plus the high wages make the work impossible. Therefore, we have now no hall porter, no page, no room service, no maids after 8 p.m., no early breakfasts and no one to meet the trains.
I have a comment from my own constituency which says:
The payment of treble wages for bank and customary holidays will stop us from offering any facilities to 'chance' customers for meals. It is not desired by any member of the staff, who consider treble wages stupid and unfair,
because of course they know these treble wages are going to force the hotels to close down on Christmas and bank holidays.
Another tourist centre writes:
Tourists and overseas visitors have on many occasions been turned away because I have had to send my staff off duty, and as the next nearest hotel is 10 miles away their chances of a meal have been very poor.
He writes that in spite of the common law obligation which imposes upon an inn-keeper the duty of serving a meal if he can. Another comment from my own constituency says:
The staff generally, whilst perfectly willing to give service as in the past, have often to be forcibly sent off duty, and resent this very much.
Finally, there is one other comment I should like to give. It says this:
This year we are closing for Christmas, the first time in over 100 years. I had a party of chance people who required a dinner at 8.30 but unfortunately they were late,


resulting in a cost of £15 extra in wages to serve them.
In conclusion, I suggest that the Government have given scant or little consideration to the hotel catering industry, and in view of the fact that it is the third or fourth largest industry in this country I cannot understand why the Government do not give the industry more assistance. I should like to give one other example of the way in which this great industry is treated by
members of the Government themselves. Recently the British hotels and Restaurants Association had their first big conference, and although many Members of the Government were invited to attend, not one member of the Government was able to accept; whereas, if any of us go to a film premiere we will see more Cabinet Ministers than film stars.

Mr. Bottomley (Secretary for Overseas Trade): I accepted.

Mr. Taylor: I am sorry; it may be true that the hon. Gentleman accepted, but he was nevertheless not able to attend. I repeat that this industry is one of the biggest earners of hard currency in the country and we hope that its capacity for earning dollars will be increased. It will not be increased until some of the over-burdening handicaps which have been imposed upon the industry are removed. I can only assume that it is the Government's intention to bring this industry down to such a low level that they will be able to turn round and say, "Because you have not been doing your job, we will now nationalise you."

3.15 p.m.

Sir Stanley Holmes: We have just listened to a speech by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor) which has with great cogency set out the difficulties and tribulations under which the hotel and catering industry has been suffering for the past three years. It is well that he gave details of so many of their difficulties, it is well to call the attention of the Government to them, and it is well that the public should know. If it is correct that we want to encourage as many visitors as possible to come from overseas to our shores, especially from hard currency countries, then something more must be done to assist the hotel and catering industry.
My hon. Friend referred briefly to what will happen in this country at Christmas. I want to devote myself, therefore, entirely to this domestic matter, because it is affecting not merely the hotel and catering industry, but also the public. In the days of our grandfathers and grandmothers it was customary for the family gathering to be held at home at Christmas. Friends and relations all went to these, and there were few Christmas dinners sought at hotels and restaurants. However, during the past two generations the tendency to have family parties or parties of friends at hotels and restaurants has grown steadily. It has grown all the more in the past three years owing to the difficulty of getting adequate provisions at home for the family party.
Furthermore, besides going to a restaurant or hotel in one's own town on Christmas Day, Boxing Day or New Year's Eve, many people have taken advantage of the opportunity at Christmas time of going away for a few days, particularly to hotels on the sea coast. Indeed, last year it would have been difficult for anybody to find a room in any of our seaside towns at Christmas time. Another reason why people are going to hotels and restaurants, or away for the Christmas period, is to give the housewife a chance; to let her off one or two meals without having to organise them, to find the food, to cook them, to do the washing up. Still more does that apply if the family can go away to the seaside for three or four days and she has a complete rest from her family duties during that time.
This is being made quite impossible this year by reason of the increased wages which are battened down upon the hotel owner and the restaurant keeper as a result of the wages scheme which came into force at the beginning of April this year. Treble wages have to be paid in hotels and restaurants during the Christmas and the New Year periods. It is quite impossible for the hotel keeper to pay those wages and to pay his way when he is not allowed, even although he has to pay treble wages, to charge more than 5s. for a meal.
Last week my hon. Friend the Member for Eastbourne asked a Question on this matter. Following the Minister's answer


I ventured to ask a supplementary question—whether he did not think that the public, knowing that hotels and catering establishments had to pay treble wages, would not be willing themselves to make an extra contribution to the cost of their meal in order to meet the extra charges? The Minister answered,
That is a matter of opinion."—[OFFICIAL REPORT, 8th November, 1948; Vol. 457, c. 1244.]
I hope that answer did not mean that, while I was of opinion that the public would be agreeable, the Minister was of the opinion that the public would not be willing to do so. I hope he will reconsider this matter. He said—I think it was in his constituency—last week-end that he was going to try to do something but that it would not be very much. All that he told us here was that he would try to do something about crackers. I could not help feeling that that was an excellent word adequately to describe the Minister's attitude on this matter.
The people of this country have been worn down by the life they had to lead during the war—that was compulsory and accepted generally—and the life they have had to lead during the past three years. They have got used to controls. They do not seem to have the spirit to fight against them. They have become used to ever-increasing prices. I cannot believe that, in order to have a family party or to have a party of friends for Christmas, Boxing Day or the New Year, the public themselves would not be willing to pay a little more so that the hotel keeper, whilst, probably, not making a profit, might at any rate be able to make ends meet by getting something extra.
I venture to hope that the hon. Lady will be able to tell us that the thousands of men, women and children throughout the country who would like to go to hotel or restaurant during the Christmas season will be able to do so by some concession on behalf of the Minister of Food.

3.23 p.m.

Mr. Leslie: I listened with interest to the speech of the hon. Member for Eastbourne (Mr. C. S. Taylor) about the plight of hotels now that they have to pay a living wage to their workers. I can quite understand his feeling. But there is a mighty differ-

ence now from the pre-war days, when hotels could get aliens to work for nothing and to depend solely on tips. What has happened is that the Catering Wages Board was set up. With its representatives of the employers, on the one side, and the workers, on the other side, were two independent members. Surely, they have the means in their own hands to decide what rates of pay should operate. This is not a question in which the Government should interfere, but a matter for the Wages Board, upon which the hotel proprietors are represented. The remedy is in their own hands.

Mr. C. S. Taylor: They will all be shut by the time that machinery has been gone through.

Mr. Skeffington: Nonsense.

Mr. Leslie: They are closing because they have to pay a wage now which they did not have to pay before. That is the real reason. They have the solution in their own hands. All they have to do is to put before the Catering Wages Board the fact that they cannot pay these rates of wages, and try to get them amended. It is a simple matter.

3.25 p.m.

Sir Patrick Hannon: I wish to support the very energetic and inspiring plea made by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). Let me at once disclose the fact that I am associated with the hotel industry, in a very modest way, as director of a group of hotels on whose board I represent debenture shareholders. The hotel industry is being crippled from week to week by restrictions imposed upon it by His Majesty's Government. No one realises the difficulties of the industry more than the Parliamentary Secretary to the Ministry of Food, and with every representation I and other hon. Members made to her, she has expressed sympathy.
We are trying to bring people from all over the world to this "green and pleasant land." It is a curious paradox in our social life that the Government are inviting people through every kind of organisation to visit us and yet are crippling those who have to provide


accommodation for those visitors. I suggest that the hon. Lady ought to hammer some common sense into her colleagues. She has all the constituents of common sense. I am always pleased to see her in this House and admire the way in which she tackles her duties as one of His Majesty's Ministers. Here is a great opportunity for her to do something for an interest which can make a substantial contribution to the dollar-earning capacity of the nation, and which itself as an industry has far-reaching consequences to the employment of large numbers of people.
Apart altogether from the seaside hotels, we have our residential hotels. I lived half my life in the Queen's Hotel, Birmingham. The difficulties in the management of that hotel and other hotels which have come under the Transport Commission have increased tenfold because of the operation of the various restrictions imposed by legislation and Departmental orders in this House. The trouble with staff, difficulty of arranging holidays, and so on, and the limitation placed on the opportunity for giving free play to the development of an hotel to attract visitors is one of the scandals of our time. I see two representatives of His Majesty's Government sitting side by side on the Front Bench. "They grow in beauty side by side." Can they not do something to bring some sort of help to this industry to get it out of the morass into which it has fallen?

3.28 p.m.

Mr. Norman Smith: The trouble with hon. Members opposite is that they assume that there is a high technical level among the people who run the hotel industry of this country. I can testify from rather bitter personal experience over many years that that is a long way from being the case. The hon. Member for Eastbourne (Mr. C. S. Taylor), who ought to know better, in talking of these things wants the House to believe that hotels are unable to pass on to the consumer added costs involved as a result of recent legislation.
In this country there is a very unhappy institution known as "bed and breakfast." It is an institution which is universal in our country. They charge for bed and breakfast and there is nothing whatever to prevent them increasing, and

increasing very substantially, the bed and breakfast charge, without giving a better breakfast at all. I often pay anything from 18s. 6d. upwards. It depends on the hotel to which one goes, but it is as much as 27s. 6d. for a bed which is just the same as it was before these added charges came into effect and for a breakfast which is sometimes worse. The trouble with some hoteliers is that even if one gives them a perfectly good, succulent kipper—and a kipper is one of those articles of food which is special to this country, and we know how to produce it better than other countries do—they cannot prepare it and bring it to the table decently. Let the hon. Gentleman encourage his constituents to learn the technique of their trade.
It happened that quite by accident, when I was a very impressionable young man before the first world war, I took a job in Belgium. I did not know what was going to happen to me when I did so. I had not been there for long before I found that my poor dear mother had not known all the ways of preparing fish. I discovered that there were other ways of eating fish as well as having it boiled. I discovered in Belgium at the age of 22 that there were other sauces as well as what is known in this country as melted butter.
The trouble so far as some constituents of the hon. Member for Eastbourne
are concerned and the trouble with their industry generally, is that they do not all know their business. Since I took that job in Belgium as a young man I have wandered many miles off the beaten track in the Western part of the Continent of Europe. Do I not know how much better they do these things on that side of the Channel—as they did in the eighteenth century—in all that pertains to the day to day management of hotels? It is no use the hon. Member for Eastbourne coming along and pleading, with tears in his eyes, for these people when what is really the matter with them is that they need teaching their trade, just that.
I hope that the Parliamentary Secretary will not give the hon. Member for Eastbourne any change in this matter of the 5s. I will tell the House why. I represent an industrial constituency in which the ordinary electors are very good dollar earners, skilled mechanics and techni-


cians. I sat down with 50 of them and their wives last evening at a smoking concert in a room over a public house. The occasion was strictly non-political. We get on very well, those skilled technicians and their wives and I. In the course of my political work I have represented to them that our country is more or less in the position of a city in a state of siege. I wonder what hon. Members opposite would think if there was a siege, and it was suggested that the officers' mess, and only the officers' mess, should have additional rations for Christmas? How would they feel? Hon. Members opposite would recoil with horror at the bare idea. They would resent it very much. There is not an hon. Member opposite to whom such an idea would ever occur. Every one of us would be much too decent to suggest or even to think of any such thing. But that is how this suggestion sounds to those skilled technicians and their wives with whom I had cheese cobs and pints of ale last night.
If I went to Nottingham and attended an event of that kind after the Parliamentary Secretary had said "All right, they shall charge more than the 5s. for a meal," what would they say to me? They would say, "Have you not told us that the country is in a state of siege? We cannot spend 5s. on a meal." Some of us on this side of the House go to much trouble, at the risk of damping the enthusiasm of our supporters, to induce the industrial classes of this country to collaborate wholeheartedly with the Government in operating the wage stop and all that it implies. It will make it much harder for us to do that—especially when we have people who, not in good faith, are stirring up trouble behind our backs and on our flanks—if the Parliamentary Secretary gives way to the hon. Member for Eastbourne.
I do not believe in austerity. There is no hon. Member of this House who likes austerity less than I do. I am not in the least ashamed to say that I like eating, and I get pleasure from good food. I am humbly thankful that I married a wife who is a good cook. But really it is a complete fallacy to suppose that the excellence of the meal is a mathematical function of the amount of money spent on it. It is not. An excellent meal can be obtained without paying more

than 5s. and I think it is rather indecent to suggest, at a time when we are asking people to work very hard and accept austerity that a few people going from one Grand Hotel to the next Grand Hotel should be allowed to spend more than 5s. on a meal.
I could get a meal for 5s. Give me 5s. to spend and let me select the ingredients and, with the aid of my wife, I will give a repast fit for anyone. I can go to restaurants in London and in this country where I can get a meal for less than 5s. and I think it is a little disgusting to ask the Parliamentary Secretary to lift that 5s. limit. I have had little change out of her in the past. She has never done much for me but I hope that on this occasion she will listen to my plea. The speeches from hon. Members opposite, if they mean anything, are a plea for the continuance of as much ostentation as possible in all that pertains to public eating, and to hotel accommodation. I would rather see the development of really efficient hotels which do not seek to give differential service for differential charges. I would rather see the development of hotels concerned not so much to give scope for ostentation as to provide comfort for people who are reasonably capable of looking after themselves.
I am wholly out of sympathy with the views expressed by hon. Members opposite. They are based on a misconception and on the existence of a general low standard of knowledge, particularly of the culinary art, in this country, and I hope that hon. Gentlemen opposite will get no change from the Parliamentary Secretary.

3.38 p.m.

Mr. E. L. Gandar Dower: I wish wholeheartedly to thank the hon. Member for Eastbourne (Mr. C. S. Taylor) for raising the difficulties of the catering trade. I was fortunate in March to be able to draw the attention of the House to the difficulty of the hotel trade in the rural districts of Scotland caused by paucity of petrol allowance. Therefore, if I confine myself to the effect of the Catering Wages Act on Scottish rural hotels I hope I shall be forgiven.
I do not think the Act was one of the brightest pieces of legislation which has passed through this House. It


endeavoured to standardise from Piccadilly to the rural districts of Sutherland the same rates of wages and hours. I learnt the effect of this hopeless doctrine in 1933, when after the collapse of American economy, N.R.A. tried to standardise the cost of haircuts from Fifth Avenue to Calgary.
Hon. Members will remember that Lord Hacking, though under the stress of war, fought vigorously to prove by commonsense arguments that when this Act was applied it would fail to work. However, I feel that its future effect was not then fully realised. Every hon. Member must know and consider the effect of legislation on his own constituency. Therefore, if on behalf of Scotland—I do not think that any Scottish Member has yet spoken—I draw the attention of Members to what that Act has done to the rural districts of Caithness and Sutherland, I hope I may be forgiven. In that part of the country, hotels are often 10 or 15 miles apart and conditions are quite different from those in-the West End of London. I say with sincerity and without exaggeration that we find a great falling off in standards despite the fact that hotel proprietors are sacrificing their health in order to maintain comfort for their guests. In the season they work 16 hours a day and sometimes more. The highest credit is due to these proprietors who without consideration of the effect on themselves are endeavouring to maintain past standards and find it impossible to do so.
Where there is a seasonal trade there must be give and take on hours of labour. Some hon. Members will know Switzerland. They will appreciate that in the season the Swiss staff do not mind how hard they work, because between the seasons they are allowed to take things easily. That kind of condition must be applied to seasonal hotels in Scotland and to a less degree to England and Wales. The Scottish hotel season lasts from 15th June to 15th September, and the winter season from eight to nine months. What happens to the hotel staffs in the winter? They cease to be employees waiting on guests. They become more or less members of the family waiting on the family. There is little entertainment in Scottish villages except dances, a high standard of local theatricals and the B.B.C. Also, of course, there are the inevitable football

pools which are disturbing this House sufficiently without any further reference.
We all appreciate the importance of attracting American tourists to this country so that we can secure their invaluable dollars. Hon. Members know that Americans inevitably have Scottish ancestry. That is one of the reasons why America is so great. As an Englishman who has lived in Scotland for 18 years, I hope that this House will not provide any sop to Scottish Nationalism and will not give any other example of English stupidity applied to Scottish conditions. In the season many people go fishing. I do not know why it is, but fish often bite late at night. When one comes back at midnight with a couple of fish—the largest the hotel has ever seen—there is an unhappy atmosphere when one is told that the late hour has cost the management an extra pound. Then, there is no consideration for unpunctual arrival, due to roads. I have known motorists happily consider that they can take Sutherland roads at 20 miles per hour, but I discovered, during an Election tour, that 12 miles per hour was sometimes the limit. There is also the question of breakdown, with garages five or 10 miles apart, and the question of late trains, and I would ask the House to examine the unpunctuality of trains running to Wick or Thurso.
It is usual to wind up with a peroration. I would like to remind the House of the picture drawn by Dickens of Pickwick—that wonderful paunch, which I have tried to emulate. The Minister of Food has done much to reduce that paunch. I beg him however not to introduce a new kind of hotel welcome—"Get up those stairs—lights out—or pay £1 to the night porter."

3.47 p.m.

Sir Peter Macdonald: Like the other hon. Members who have spoken, I should like to express my gratitude to my hon. Friend who opened this Debate for giving us an opportunity of placing certain facts before the Parliamentary Secretary, in the hope that she will take some notice of our grievances and do something to put them right. Like other hon. Members, I was horrified the other day when I heard the Question asked by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor), answered in the way it was answered by


the Minister of Food. My hon. Friend asked what provision was being made for an increased charge for meals at Christmas and the New Year, and the answer of the Minister was that no extra charge would be allowed for meals, because that was a horrifying thought to him. The Minister did say, however, that he might be able to allow an extra charge for crackers.
I think that is the most hypocritical thing which I have heard in this House for a very long time, and it is typical of the sort of thing that is going on, which is leading to wangling at all levels in this country, bringing the law into disrepute and discrediting this great nation. This hypocrisy runs through the whole of our system, and it is due to the attitude of Government Departments towards these regulations. First, they impose impossible regulations, which they refuse to revoke, and then they employ snoopers to go round prosecuting people. Then, we even hear of snoopers prosecuting snoopers, and that sort of thing goes on until the whole Government is in disrepute.
I cannot understand why the Minister sticks so rigidly to this 5s. limit on meals. He has told us that the catering industry can put the facts before the Catering Wages Board, and that they would be considered, but that has been done for years. This 5s. rule was imposed in 1942, and, practically ever since, the industry has been trying to convince the Catering Wages Board that they cannot possibly provide 5s. meals today in any of the first-class hotels in the country and make a profit. Why is it possible for the Board of Trade, for instance, to subsidise the tourist board, which has high officials who are sent to America to encourage dollar tourists to come here? They come here on luxury liners like the "Queen Mary" and the "Queen Elizabeth," which, I am glad to say, are beautifully fitted out in great luxury, on which no Purchase Tax is paid; they are served with magnificent meals, and then are placed on special trains for London and taken to hotels whose proprietors have to pay Purchase Tax on all their equipment, furnishings and linen and everything that goes into the hotel and catering industry.
We have here a representative of the Board of Trade. He must know that it

is utterly useless to subsidise the tourist industry in this country, if tourists are to be treated in that way by the Board of Trade and by the Ministry of Food when they come here. I hope that they will do away with the anomaly which imposes such heavy restrictions on the hotel and catering industry as-distinct from the shipping and transport industry, although both industries are doing the same job. Where is the fairness and justice in that differential treatment?
What the Tourist Board is doing today, because of this limit of 5s. the Ministry of Food imposes on the price of meals in hotels, is to subsidise tourist industries in Continental countries. Americans are not going to come here under these conditions. They will go to the Continent where they can get 100 litres of petrol on arrival and live in hotels that are generally subsidised by governments in re-equipping themselves, and where they can spend as much as they like on food or drink at any time of the day or night. The average American or Canadian, or visitor from some other dollar area, wants to have a holiday when he comes to Europe. He will not find it if he comes here at Christmas or at the New Year. He will find the hotels and catering establishments closed in his face.
That is certainly the case in my constituency. We had hotels opened last year which had not been opened for years because of the war. They were full of visitors last Christmas, and they all enjoyed themselves. What is to happen this year as a result of these crippling and stupid wages regulations? I am not opposed to good wages in hotels and restaurants, believe me; I am opposed to the stupid way the regulations are composed. Many hotels in my constituency are to close down this winter, if they have not already been closed. Only the other day in my constituency I went to an hotel where they pride themselves on giving first-class service. They had many guests there. I went to have some tea before going to a meeting, but when I asked for tea I was told, "We are very sorry, Sir, but we no longer serve tea." When I asked how the visitors got on I was told, "They have to take it or leave it, because we cannot, owing to the new wages regulations, keep a staff on in the afternoons to serve tea." That is only one example out of dozens.
It is time that the Minister of Food and the Government generally faced up to the realities of the situation and did something about the Catering Wages Board. When we examine the membership of the Board we find people on it who know nothing about the hotel and catering industry. I was one of those who were opposed to the Catering Wages Bill when it was rushed through this House during the war in the absence of our own leader who was abroad. It was rushed through at the behest of the then Minister of Labour who is now the Foreign Secretary. We regarded it as a breach of faith, which is what it was. We then warned him what the effect would be. We warned him that the Board would be placed in the hands of people who knew nothing about the industry.
That is what has happened. We said it was a ramp to get the 500,000 people in the industry into trade unions. That is what has happened, and that is why these crazy regulations are being imposed on the industry today. The people on the Wages Board who represent these trade unions are pressing for conditions which they know full well are impossible, in order to encourage people in the industry to join those unions. In my constituency there are hoteliers who say that their summer staffs are today walking the streets idle because those hoteliers are not allowed to employ them for anything below summer wages.
A short while ago reference was made to class distinction and the provision of better food in an officers' mess than in other messes. I do not know what the hon. Member knows about stations, but not so long ago I was on a station where I was responsible for the administration. There was no distinction at all on that station. We all had very good Christmas fare. The men's mess had turkey and all the things which people expect at Christmas. The sergeants' mess was equally well served, and the men's mess was served by the officers, which is a custom in the Service. There is no question of distinction whatever. It is a question of everybody being given a little extra at Christmas or New Year which they do not normally get during the rest of the year.
I hope, that now, nearly four years after the end of the war, that the Govern-

ment will consider making a statement at an early date in order that these people may make up their minds whether they can provide any additional fare for the Christmas season. I hope the hon. Lady will be able to make a statement so that these people know where they stand.

3.58 p.m.

Mr. A. R. W. Low: The effect of these regulations on the tourist trade from abroad has been adequately dealt with today. I want to refer to the effect on the holiday-making public in this country. I have always taken the view that the cost of living includes the cost of reasonable holiday making and the cost of reasonable happiness. The cost of short holidays is increasing, not just because wages have increased but because in certain parts of the country wages rules have been applied which are entirely unsuited to the needs of that part of the catering industry.
Blackpool hotels—and I speak about them particularly—have not the same conditions or the same aims as the big hotels in London. They have not even exactly the same conditions and aims as the big hotels in the constituency of my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). It is ridiculous to have a set of wage regulations which are applied overall to achieve the same flat average to deal with all the different conditions in the different hotels. I wish the hon. Lady would ask the Minister of Labour to have another look at this point. I do not object to fair wage regulations, but the wage conditions of people working in the hotels of which I know were very good before this order came into effect. That is the point. It is useless trying to impose the same wage conditions in hotels all over the country. That way will lead to the disorganisation of the hotel industry.

It being Four o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

Mr. Low: That way will lead either to the raising of prices or to the lowering of services, neither of which I believe the hon. Lady or the Government want


to see and neither of which I want to see. I want to see an increase of services and a lowering of prices.

4.1 p.m.

Major McCallum: I want to plead with the hon. Lady for the Scottish hotel industry in particular. I think that she will know that the Scottish Tourist Board, through their chairman, Mr. Thomas Johnson, have made very strong representations on the effect of this Wages Catering Regulation on the remote Scottish hotels on which the Scottish tourist industry must obviously depend. When I heard the hon. Member for South Nottingham (Mr. Norman Smith) talking about the hotel industry, I gathered that he had not the vaguest idea of how the greater part of the hotel industry works in the Scottish islands. He may know something about the city hotels but, on the islands of Scotland, there are hotels which have of necessity to be open during the middle of the night. Small boats arrive with people during the middle of the night, and the hotel keepers today, in view of the wages which they have to pay and the restrictions on the hours of work, cannot keep going. They have to close down the hotels, and travellers are stuck for anywhere to stay. I know from my own experience, in my own constituency, that I have had to beg accommodation from private individuals because hotels have had to close down. I ask, therefore, that special attention be given to the question of the hotel industry in the North of Scotland.

4.3 p.m.

Lieut.-Colonel Lipton: In his desire to help the tourist industry, the hon. Member for the Isle of Wight (Sir P. Macdonald) made an astonishing suggestion which I think is hardly likely to appear in the official programme of the Conservative Party. He said that in order to encourage tourists to travel to this country, the Government should, if necessary, subsidise the hotel industry.

Sir P. Macdonald: I did not say anything of the sort. I said that the tourists should have the same facilities in the hotels as they have on the ships, and that there should be a reduction of Purchase Tax.

Lieut.-Colonel Lipton: The position in connection with the various pleas put forward by way of encouraging tourists to come to this country, especially those tourists who spend hard currency, is this: First of all, tourists who come to this country—and we are all pleased to see them—are already getting valuable concessions in the way of petrol, exemption from coupons, Purchase Tax and things of that kind. I ask myself whether they are to be given further concessions and the privilege of having meals not available to the general public. That is really not going to make the tourist traffic in this country at all popular, because 99.9 per cent. of the people of this country cannot afford to spend anything like 5s. for a meal. The arguments which have been adduced in favour of a very small and limited class, and for the extension of special privileges to tourists from abroad are not likely to commend themselves, if carried to the extreme limit advocated by hon. Members opposite, to the general opinion of this country and to people who are finding it extremely difficult to make both ends meet.

4.6 p.m.

Earl Winterton: In view of the speeches which have been made by hon. Members opposite, I should like to know whether the Government are in agreement with those speeches. Judging from the speech of the hon. Member for Brixton (Lieut.-Colonel Lipton), it would appear that the last thing that we want to do is to make British hotels of such a character that people from overseas will visit them.
I understood that it was an important part of Government policy to attract overseas visitors to this country, especially from America, and to see that as many as possible of the British people with the necessary wealth to afford to pay for holidays overseas, spend their holidays in this country, and spend their money here rather than spend it overseas. I ask the Government to state whether that is their policy or not. If it is their policy, I hope that the hon. Lady will say a word in rebuke of the speech to which we have just listened. I cannot imagine a speech which is more likely to deter foreigners from coming to this country. In effect, the hon. and gallant Member said that we did not want them; they are wealthy people; they


will annoy the people of this country; let them stay away. I hope that the Parliamentary Secretary will entirely repudiate the view put forward by the hon. and gallant Gentleman the Member for Brixton (Lieut.-Colonel Lipton).
I want to put three very specific questions to the hon. Lady. I want to ask her, in view of the evidence brought forward by my hon. Friends who represent constituencies where the hotel industry is important, and particularly by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor) in his very admirable speech, how if we are to compete with foreign hotels—and every hotel above a certain standard in this country is competing with foreign hotels for tourist traffic and to prevent people from this country going overseas—they can possibly compete if they are to provide a 5s. meal, if they are not allowed to have any new equipment—and I can give personal instances where hotels have been forbidden equipment—and if they are to have this fantastic regulation imposed on them? I challenge the hon. Lady to tell us whether there is a single country in Europe, which is in competition in the hotel industry with this country, where these three formidable handicaps are imposed.
In my opinion, the British hotel industry is being abominably treated. Many ex-Service men who put their money into it arc losing their money because they cannot carry on, and many members of the catering trade, cooks, waiters and so on, are being thrown out of work, or will be thrown out of work, because of the conditions which are being imposed. I would go further and say that the British hotel industry is more handicapped, harassed, interfered with and spied on by Government Departments, local authorities and the police than the hotel industry of any other country where catering for foreign visitors is an important invisible export. I challenge the hon. Lady and her supporters in this Debate, or in any future debate, to tell me of any other country in Europe where the law, the regulations or the interpretation of policy is so severe as in the case of the hotel industry of this country. It is only fair to say that to some extent this has always been the

case, and to say that it is not entirely the fault of the present Government.
I must say that most of the enactments in regard to British hotels are simply fantastically out of date. Take the question of the ventilation regulations for bathrooms and w.c's. One of the main reasons why it is impossible to provide bathrooms and w.c's. for every room, which is what every tourist and visitor demands, is because this ridiculous regulation has been imposed on the hotel industry. Far worse than that, and far worse than the regulations imposed by the Government on the hotel industry, is the attitude of the law. As one who usually supports the police, I take this opportunity to say that many police authorities show a most fussy attitude towards the licensed trade generally. If I all the time they take to detect the slightest infringement of the law by hotels was devoted to preventing more serious I crime, there would not be so many criminals abroad today. That is the advice I give to a number of chief constables.
While the situation has always been bad, I consider that this Government, by its statements and its policy, has made the position infinitely worse. Obviously the Government hate the type of hotel which caters for the most valuable foreign tourist—the rich man. It hates the so called luxury hotel and always gets in sly attacks on these hotels, not forgetting those by members of the Front Bench including the hon. Lady the Parliamentary Secretary to the Ministry of Food, except, of course, at the time of their official conference when it appears that hotels are useful, judging from recent information.
I end by making a specific charge which I commend to the notice of the hotel industry and that is that this Government are steadily and deliberately trying to denigrate the big hotels, suggesting that they are the resort of the worthless, and idle rich, and handicapping them and indeed all other hotels which are in competition with our rivals for the tourist trade overseas with their absurd and inadequate price limitation for meals. One hon. Gentleman on the other side asked what about other businesses where the cost of labour has gone up. The answer to that is simple. In such businesses where the cost of labour has risen there is nothing to prevent them charging more


for the goods they manufacture, but hotels are not allowed to charge more for their meals. Wages and costs and indeed everything has gone up to a large extent but this limitation is still imposed upon them.
I further charge the Government with the ultimate determination, in accordance with their long-term policy which is becoming more and more apparent as we go on, to nationalise the whole licensed trade. That is the long-term policy, and speeches such as we have heard from the two back bench supporters of the Government today are admirable preparation, what I might call ground furrowing, for that scheme. For a series of years they have denigrated the industry. They say that it is a rotten industry run by capitalists for capitalists and that it treats its workers badly. There will be a few Ministers' speeches which will call attention to this matter and finally in a King's Speech will come the determination to nationalise.
Through this House I say to the licensing trade that they had better be aware of the intentions of the Government, as shown in another Bill recently presented which we must not discuss today but on another occasion, and when this matter comes before us we shall discuss it very fully indeed. Meanwhile I beg the hon. Lady to take heed of what was said by my hon. Friend the Member for Eastbourne and answer his speech. Perhaps she will tell us how she supposes that in present conditions the hotel industry could possibly carry on and prosper.

4.14 p.m.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summerskill): I have listened very carefully to every speech that has been made. Most of the hon. Gentlemen who have spoken represent seaside resorts and, therefore, I can quite understand that they feel very strongly on the question of conditions obtaining in the hotel industry. I must confess that 95 per cent. of the speeches that have been made have been criticism of the operation of the Catering Wages Act, an Act which was passed by the Coalition Government. When the right hon. Gentleman the noble Lord the Member for Horsham (Earl Winterton) rose just now and asked me questions, challenging me and attacking

the Government, I again listened carefully, but not one of those questions of his really related to what, after all, is the concern of my Department in this Debate—whether the 5s. maximum charge for meals adequately covers the cost of food. I was very much surprised at the noble Lord with his experience of this House not realising that I cannot encroach upon the province of another Department. Does he not realise that that is what it means when he gets up here in this emotional condition and asks me to reply for my right hon. Friend the Minister of Labour. My right hon. Friend the Minister of Labour is responsible for operating the Catering Wages Board.

Sir P. Macdonald: We asked for him to be here. Why is he not here?

Dr. Summerskill: The hon. Gentleman the Member for Eastbourne (Mr. C. S. Taylor), who gave notice to raise this question on the Motion for the Adjournment, invited me to be here. I tried to contact him on many occasions so that I might coach him for this occasion. I realised that probably he was going to put his foot in it. During the last 24 hours he has been running round different Government Departments—I would not have revealed this if the hon. Member for the Isle of Wight (Sir P. Macdonald) had not intervened—asking Ministers at the last minute, all of them, to come along here in order that they might hear what has been said.

Mr. C. S. Taylor: Mr. C. S. Taylor rose—

Dr. Summerskill: I must have time. If only he had responded to my frequent telephone messages to his home, to the House, if he had responded to my P.P.S.—I have done everything except run after him round the Library—we would have had a quiet chat and I would have explained to him carefully the operation of this Act, about which everybody feels strongly. The hon. Member for Caithness and Sutherland (Mr. Gandar Dower) honestly said that he was going to devote the whole of his speech to the operation of this Act. On an Adjournment it is right for hon. Members to discuss any question they like, and they cannot be ruled out of Order. Therefore, I sat back and listened to them, but it would be quite improper for me to encroach upon the work of another Government Department.

Mr. Taylor: May I answer——

Dr. Summerskill: The hon. Gentleman and his Friends have had an hour and a half and I have only 12 minutes.

Mr. Taylor: But the hon. Lady—[HON. MEMBERS: "Order."] On a point of Order, Mr.
Speaker. The hon. Lady has made certain accusations against me, and I want only to put her right in the nicest possible way.

Dr. Summerskill: I do not want to encroach upon your preserves, Mr. Speaker, but I do not think that is a point of Order, and I think I am justified in demanding 12 minutes. I fully realise that when hon. Gentlemen opposite think of catering, they probably think of my Department but, as I have already said one part of that work is administered by my right hon. Friend the Minister of Labour. The operations of the Tourist Board are administered by my right hon. Friend the President of the Board of Trade. Another hon. Member said he wanted to devote himself to the need for petrol. Petrol, of course, is the concern of my right hon. Friend the Minister of Fuel and Power.

Mr. Taylor: What about the questions on food?

Dr. Summerskill: Therefore, I must ask hon. Members opposite to understand why I can only devote myself to the limited question of food and why, in our opinion, at the moment it would be unwise in the interests of the people of this country to increase the maximum price of meals.
Hon. Gentlemen have talked about the prices of sheets and blankets and so on, and they have pleaded that the maximum price of meals should be increased in order that hotel proprietors can buy these goods. They must realise, however, that if the maximum price were increased there is no guarantee that that money would be spent on necessary sheets; it might well be spent on other food, with the result that hotels would tend to buy up the un-rationed food which housewives need today in order to supplement their rations. That is why, in the first place, we tried to stabilise the price at 5s. and in some cases to reduce the price of meals, if possible. In order to help the hotel proprietor we

limited the number of courses to three, so that customers would not demand an extravagant meal. And again in order to help the hotel proprietor, we limited the amount of food he could serve by limiting our allocations.
I am surprised that hon. Members representing what might be regarded as hotel constituencies have not raised the matter of house charges. I must remind the House of these charges. So far as service is concerned, hotel owners may charge 6d. for every 5s. spent. For a private room, an additional charge of 2s. 6d. can be made for every person. A further 2s. 6d. can be charged for dancing and cabaret, and 4s. more for the service of not less than six oysters. Further—this is very important—any charge can be made for coffee or for drinks with the exception of beer. My hon. Friends behind me asked whether hon. Members opposite thought that hotel owners were not aware of these charges and powers which they possessed, and that they did not put a little extra upon these particular items. I think that my hon. Friends were right—hotel proprietors are fully aware of what they can do.
Furthermore, during the last two or three years the number of hotels able to make house charges had been increased. I want hon. Members to listen to what the most exclusive type of catering establishment can charge today. For lunch in a private room they may, if they wish, charge 15s. and, if oysters are served, another 4s., apart from the charge for coffee or other drinks. For dinner in a similar establishment they can charge 18s. plus, again, 4s. extra for oysters and anything they like for coffee or drinks.

Mr. C. S. Taylor: And do not forget the paper hat charge.

Dr. Summerskill: I suggest that if the most exclusive restaurants in the country can charge these amounts, the hon. Member for Eastbourne should realise that we have met their point.
Before I came to the House I asked what could be charged by the Grand Hotel, Eastbourne. The hon. Member who asks that people should go for Christmas to the big hotels in Eastbourne might like to hear those prices. In the


Grand Hotel in Eastbourne lunch served in a private room with music would cost 11s.—[Interruption.] Hon. Gentlemen opposite have raised the question of parties at Christmas. They are asking for people to be bright and cheerful, to introduce the Christmas spirit and to encourage people to come from abroad. Is the hon. Member for Eastbourne laughing at music in the Eastbourne hotels?

Mr. Taylor: No, I am laughing at the private room with music. Do not forget the paper hats and crackers.

Dr. Summerskill: I do not know what is the hon. Gentleman's conception of a private room. We probably differ on that important point.
But I want to approach these problems in quite a different way. When I think of a private room with two or three people and soft music I imagine I am thinking of the kind of party for which hon. Members opposite are asking for Christmas. Referring again to the prices which can be charged in Eastbourne, the price for dinner can be 14s. 6d. plus the charges I have mentioned. I suggest, therefore, that if hon. Gentlemen feel that the hotels are being dealt with perhaps harshly they should consider these facts a little more thoroughly and will realise that our most exclusive hotels are doing exceedingly well.
I understand that these requests for consideration are made for the coming Christmas holiday. I appreciate that the hon. Member's office is an honorary one, but does he know that my Department asked his organisation to let us know their costs to enable us to consider this question? We never turn down a request of this kind without carefully considering the situation. Time after time we have asked them to allow us to have their costings so that we could carefully consider their case. No hon. Member opposite would be willing that my Department should increase the maximum price before assuring ourselves that that price was justified. The hon. Member for Moseley (Sir P. Hannon), who said such nice things about me is an astute businessman. Would he blame my Department for asking the hotels for their costings in order that we might consider this in a businesslike manner? We

have asked time after time, but these figures have never been forthcoming. The hon. Member for Eastbourne said that food costs 1s. more. Why have these details not been given to us when we have asked for them? Why does he come on an Adjournment Debate and ask for this extra money? We are quite prepared to look at the question——

Earl Winterton: That is something.

Dr. Summerskill: Certainly, the noble Lord should know——

Earl Winterton: I was agreeing with the hon. Lady.

Dr. Summerskill: He may not like the Government, or my party, but he should know that my Department endeavours to be as fair as possible and never refuses to receive a deputation. I believe he is coming to see me on Tuesday and I shall have the great honour of entertaining him—

Mr. C. S. Taylor: In a private room?

Dr. Summerskill: Yes, in a private room which holds 20, so the noble Lord will be quite safe—and there will be no music.
Coming to the question of tourists, I fully appreciate the point that has been raised. My hon. Friend the Member for South Nottingham (Mr. Norman Smith) suggested—I must confess I was looking at some notes at the time—that when people came here from abroad our people must be disgruntled. I think he was misrepresented by hon. Members opposite. We recognise that the tourist trade is very important. I want dollars and I do not hesitate to say so. I even tell American friends that, and when they ask why they do not have to surrender coupons at hotels, we tell them, "We want your dollars." We want dollars because we need their canned fish and all the nice things they can sell us. We therefore welcome them.
The phrase "the matter is under active consideration," has often been used in this House. This matter is under active consideration. We are trying to see how we can make this country more attractive to tourists and I am taking note of every point which has been raised this afternoon. But I want hon. Members opposite to realise that at this moment, particularly


for Christmas, it would be quite wrong, in the interests of the ordinary consumer, to raise the maximum prices, because that would inevitably mean that poultry, turkeys and all those things which the ordinary housewife wants to see this Christmas, would find their way into hotel kitchens. Therefore, we are refusing the increase at this stage. We will consider all the points that have been made, and, perhaps later on, next year, some statement can be made.

Mr. Blackburn: May I put a point which is

very widely felt by workers in Birmingham and places of that kind. We do hope there will not be an increased allocation of meat or food to restaurants, whatever views the Minister may take on the case which has been made today.

Dr. Summerskill: In the allocations made to restaurants we are guided, to a certain extent, by the amount we give to the domestic consumer.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes past Four o'Clock.